Merger Filing Regime in the PRC: Uncertainty Still Remains in the Concept of “Control” – Complex Dilemma Faced by Foreign Investors

This article is part of a Chronicle. See more from this Chronicle

Kiyoko Yagami, Feb 12, 2015

In June 2014, the Chinese Ministry of Commerce issued Guiding Opinions on the Notification of Concentration between Business Operators, which provides further clarifications on various important areas of the merger control regime in China, including the concept of “control.” The acquisition of “control” is a key threshold for determining whether a given business transaction needs to be notified to MOFCOM. However, the new 2014 Guiding Opinions remain silent on what kind of minority acquisitions will qualify as “concentrations” under the Anti-Monopoly Law.

This article will briefly introduce the legislative history and precedent cases concerning merger control under the AML, in particular with respect to minority acquisitions, and will also touch upon practices in Japan and other East Asian jurisdictions in an attempt to predict MOFCOM’s possible supervisory approach.