Global Competition Law is primarly a practitioner's guide presenting the most salient aspects of the major competition laws country by country, giving an overview of their structure and most charasteristic elements.
Global Competition Law also provides insight into possible future developments in the field.

Global Competition Law

Before a concentration, business operators must make a declaration to the SAMA where the operation reaches the thresholds specified by the State Council (article 26).
The Guiding Opinions on notification of concentrations between business operators recall that in principle, parties must file for notification only after their agreement is signed or, in the case of a takeover bid, after the bid is p …

Merger notification

Before a concentration, business operators must make a declaration to the SAMA where the operation reaches the thresholds specified by the State Council (article 26).

The Guiding Opinions on notification of concentrations between business operators recall that in principle, parties must file for notification only after their agreement is signed or, in the case of a takeover bid, after the bid is publicly announced. However, pre-negotiation contacts with the SAMR made on a voluntary basis are welcome as they can help the parties to define the scope of the notification obligation and if the transaction may qualify as a simple case for fast-track proceedings. 

Under the Guiding Opinions, two or more transactions between the same business operators taking place within a two-year period amount to one transaction which must be notified, should the thresholds be met, at the date of the last transaction. Further, the parties legally bound to notify are now allowed to designate one of them to carry out the filing obligations but the Opinions clearly specify that they are not exempted of their responsibility if it fails to do so.

Notification is not necessary in the two following cases:

- one of the undertakings is the major shareholder of each of the other undertakings;

- one undertaking that is not a party to the concentration is the major shareholder of each of the other undertakings (article 27 AML).

The contents of the notification file to the SAMR is detailed in article 28 :

(2) explanations on the effect of the concentration on competition on the relevant market;

(4) the financial reports and accounting reports of the proceeding accounting year of the business operator; and

(5) other documents and materials as stipulated by the Anti-monopoly Authority under the State Council.

Such items shall be embodied in the declaration paper as the name, domicile and business scopes of the business operators involved in the concentration as well as the date of the scheduled concentration and other items as stipulated by the Anti-monopoly Authority under the State Council".

Once the notification completed, the SAMR has a 30-day period to conduct a preliminary review and to decide if an in-depth review is necessary. The undertakings must wait for the decision before implementing the concentration. Once the period is expired, the concentration may be implemented (article 30 AML).

In the case in-depth review is deemed necessary, the SAMR has 90 days to make a decision; during that period the undertakings cannot implement the concentration. If the operation is prohibited, it shall state its reasons.

The period of 90 days might be extended to no more than 60 days in some particular cases (article 31 AML).

However, under new Article 32 of the AML, which introduces a “stop the clock” mechanism, the Anti-monopoly Law Enforcement Agency of the State Council may decide to suspend calculation of the review period of the concentration of undertakings and notify the undertaking in writing if: “(I) the undertaking fails to submit documents and materials in accordance with the provisions, resulting in the failure to carry out the review; (II) there are new circumstances or new facts which have significant impact on the review of the concentration of undertakings and will result in the failure to carry out the review without verification; or (III) the restrictive conditions attached to the concentration of undertakings need to be further assessed, and the undertaking makes a request for suspension.” The review period continues from the date on which the circumstance for suspension has been eliminated.  

Six types of transactions qualify for fast-track proceedings and substantially reduced paperwork: i) where the aggregate market share of the parties is lower than 15% of the same relevant market; ii) where the parties to a vertical merger hold market shares of less than 25% of the upstream or downstream market; iii) where the parties to a conglomerate merger hold market shares of less than 25% of each market concerned ; iv) where the transaction consists in the creation of a joint venture outside of China, with no intention of directing activities in China; v) where the transaction consists in the acquisition of equities or assets of a company established outside of China, with no activities in China; vi) where one shareholder party acquires sole control of a joint venture, previously controlled by two or more operators. 

Mergers not eligible for simplified proceedings include: transactions where an operator goes from joint control to sole control of a joint venture that is its competitor in the same relevant market; transactions where the relevant market is difficult to define; transactions that can impede market entries or technological progress, have adverse effects on consumers or other economic operators or on the development of the Chinese economy, or other transactions that the SAMR may deem harmful to competition. Further, the SAMR may revoke its decision to conduct simplified proceedings where it appears that the parties have provided incomplete, incorrect or misleading information; a third party brings evidence that the transaction may eliminate competition in the market (which is made possible through the obligation to publish a notice on the SAMR's website for collecting third party comments, an obligation not provided for in standard cases); significant changes are brought to the transaction or on competition in the relevant market. 

Global Competition Law

932. Merger notification

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Les notions juridiques connexes

932. Merger notification

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise