This article is part of a Chronicle. See more from this Chronicle
Marc Waha, Feb 12, 2015
After the advent of the merger control regime under the Antimonopoly Law in 2008, “MOFCOM merger approvals” quickly became synonymous with transaction delays, costly fees, and significant administrative burden. Even in transactions that did not present competition issues, the requirement to obtain Chinese merger control approval was often a matter for discussion at Board-level. Investment bankers and other transaction planners were brought in to advise on the intricate art of gaining prompt clearance from the Antimonopoly Bureau of the Ministry of Commerce, even for simple transactions.
This all changed in 2014, with the introduction of a simplified merger review procedure in April. In the space of six months, in straightforward cases a “MOFCOM merger approval” has gone from a shorthand for administrative headache and significant deal delays to a reference to an efficient process delivering prompt and largely predictable outcomes.
The new procedure is a clear success. The first eligible transaction, the acquisition by Rolls-Royce of the stake held by Daimler AG in the companies’ Rolls-Royce Power Systems joint venture, was accepted on May 22 and cleared within 19 days. As 2014 came to a close, 83 concentrations had been accepted under the new rules, 69 of which had been cleared within 27 days on average.
Parties were quick to make use of the new rules. Three months after they were introduced, roughly half of all merger filings were made under the new procedure. This proportion increased even further during the last quarter of the year, with close to two-thirds of all merger decisions adopted during the period following a simplified procedure.
In this brief article we take stock of where things stand a little over six months after the first case was accepted for simplified treatment, and we identify some remaining challenges.