Long ago, the U.S. Supreme Court confirmed that partial acquisitions are subject to the Clayton Act's prohibition against transactions that may substantially lessen competition. Since that time, the Department of Justice and Federal Trade Commission have challenged many partial acquisitions (as have private plaintiffs-typically firms attempting to fend off hostile tender offers). And, after years of explaining their views in consent decrees and litigated cases, the agencies included an entire section on partial acquisitions in the 2010 Horizontal Merger Guidelines. While the agencies have challenged partial acquisitions in a variety of contexts and have imposed a variety of remedies, all such challenges share an underlying theme-there must be more than an "ephemeral possibility" that a transaction may cause competitive harm. As one court has explained, in order to violate the Clayton Act, a transaction must create an "appreciable danger" of anticompetitive effects.
Merger enforcement in China is not as well-established as it is in the United States and the Ministry of Commerce of the People's Republic of China is still developing its substantive and procedural standards. There is no doubt, however, that, as in the United States, partial acquisitions can violate China's Anti-Monopoly Law ("AML"), although MOFCOM has provided little guidance to date on how it will apply the AML to partial acquisitions. MOFCOM's recent enforcement action in the Alpha V-Savio transaction required remedies because MOFCOM "could not rule out the possibility" that a partial acquisition "might have" anticompetitive effects. Whether this recent action suggests that MOFCOM may be adopting something akin to an ephemeral possibility standard, and will be much less tolerant of partial acquisitions than their counterparts in the United States, remains to be seen.