Non-Horizontal Mergers in China: A Case Study of KLA-Tencor/Orbotech

By Vanesa Yanhua Zhang, John Jiong Gong & Amanda Jing Yang – 

In this paper, we analyze SAMR’s conditional approval and its competition concerns regarding the proposed acquisition of Orbotech by KLA-Tencor. Upon analysis into the potential spillover effect, we conclude that there would be no harm to competition, considering the transaction’s nature of being a conglomerate merger, a decided lack of economic incentive to tie or bundle, and the low entry threshold in the relevant markets. We further look into all the conglomerate transactions which were conditionally approved by China…

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