In order to specify the applicable standards for simple cases of concentration-of–business-operators, the Ministry of Commence of the People's Republic of China (MOFCOM) put into effect a simplified merger review system as of Feb. 12, 2014, by publishing the Interim Provisions for Standards of Simple Cases Related to Concentration of Business Operators (the Interim Provisions).
The Interim Provisions set out the thresholds of merger fillings in the simple-case category, which apply under the following circumstances:
- Where, in the same relevant market, the total market share of all business operators participating in the concentration is less than 15 percent;
- Where an upstream-downstream relationship exists among the business operators participating in the concentration, and the market share of such business operators in both the upstream and the downstream markets is less than 25 percent;
- Where the business operators participating in the concentration are neither in the same relevant market nor have any upstream-downstream relationship, and their market share in each market relevant to the concentration is less than 25 percent;
- Where the business operators participating in the concentration intend to establish a joint venture outside the territory of China, and the joint venture will not engage in any economic activities within the territory of China;
- Where the business operators participating in the concentration intend to acquire the equity or assets of an overseas enterprise, and the overseas enterprise does not engage in any economic activities within the territory of China; or
- Where a joint venture jointly controlled by two or more business operators will be controlled by one or more of the existing business operators after the concentration.
MOFCOM may also revoke its recognition of a transaction of concentration-of-business-operators as a simple case under certain conditions.
The Interim Provisions are available here (in Chinese).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.