How to Deal with Merger Control of Listed Chinese Companies
Liyong Jiang, Jan 25, 2012
China's capital market has witnessed numerous mergers and acquisitions ("M&A") among listed companies in recent years. Data shows that 564 M&A deals involving listed companies took place in China from 2005 to 2009, valued at RMB 220 million (approximately US$ 35 million; EUR 27 million) per year. Listed companies in China, which usually are industry leaders, high-quality businesses, or large-sized enterprises, are naturally actively involved in M&A activities.
Generally, M&A is the result of market-based competition. It increases economic efficiency, promotes appropriate concentration, stimulates the economy, and breaks existing monopolies. However, M&A of large companies can result in an increase of market concentration, and may have both unilateral and coordinated effects from the perspective of antitrust law. Therefore, like antitrust legislations in other jurisdictions, China's Anti-Monopoly Law ("AML") stipulates that merger control review is mandatory if certain specified filings thresholds are met. This article will examine the effects of the merger control review of M&A on listed Chinese companies.