China: China M&A Newsletter - September 2005

Last Updated: 29 September 2005

China M&A: Current Trends and Key Issues

Article by Charles C. Comey

The past twenty-four months have seen a surge in the number of increasingly sophisticated merger and acquisition transactions involving U.S., Japanese and European multinationals and China-based companies (listed and unlisted, private and state-owned). Morrison & Foerster has advised on many such transactions, including representing Softbank in connection with Yahoo!’s US$1 billion investment in Softbank’s China affiliates, and Tao Bao; UPS in its acquisition of its international express package delivery business from Sinotrans; and in its acquisition by In this environment, it is critical to focus on the right issues in preparing for and executing a China M&A transaction. As advisors to some of China’s leading technology companies, multinational and private equity acquirers, we offer the following practical observations:

Every Transaction Requires Regulatory Approval

Acquisitions of domestic Chinese corporations often require multiple layers of regulatory approval, and it is important to identify and anticipate approval issues early on to avoid delays or other complications later. For example, an acquisition of a listed state-owned enterprise will likely require approvals from the Ministry of Commerce (MOFCOM), State-owned Assets Supervision and Administration Commission of the State Council (SASAC) as well as the Chinese Securities Regulatory Commission (CSRC). Further approvals may be required depending on the structure of the transaction and industry of the target. Previously unregulated transactions that now may require approvals include wholly offshore transactions that involve Chinese resident shareholders of the offshore target. This is a direct result of two circulars promulgated earlier this year by the State Administration on Foreign Exchange (SAFE). As further described below, antitrust issues will become increasingly important, particularly for multinational acquirers, and therefore must be well considered in connection with acquisitions of PRC businesses that occur onshore or offshore.

Larger, More Sophisticated Deals

Recently we have seen the advent of much larger, more complex deals. These include the hostile battle for Harbin Brewery, as well as the widely reported leveraged buy-out underway for Harbin Pharmaceutical. Typically, companies that command larger valuations and the potential returns that are attractive to private equity acquirers are state-owned. Regulatory hurdles as well as the structuring and other similar complications that come with leveraged transactions combine to make for a challenging execution environment requiring experienced counsel to navigate.

Achieve Consensus on Regulatory Approach Early

As experienced China deal-makers know, not only does every transaction require approval, but target companies may have different corporate forms that are governed by differing acquisition rules and regulations. For example, acquisitions of domestic businesses that are not state-owned will be governed by the Tentative Provisions on Acquisition of Domestic Enterprises by Foreign Investors (2003) (the "M&A Rules"), while the acquisition of a state-owned enterprise may be governed by the Provisional Regulations on Using Foreign Investment to Reorganize State-owned Enterprises (2002). In some cases, it may be unclear whether one or more regulations govern the acquisition. It is critical in all acquisitions of Chinese companies to achieve an understanding with the target and its advisors as to:

  • Which PRC government approvals are required, and
  • Who will manage or facilitate communication with PRC Governmental Authorities.

It is important not to exclusively rely on the transactional counterpart, and to identify and manage these critical areas using the advice of seasoned counsel.

Deal Process/Quality Due Diligence

As is readily apparent from the high-profile disclosure issues facing recent global securities offerings of Chinese banks, the disclosure environment, while improving, is vastly different than that of the US or Europe. In executing China M&A transactions, proactive diligence measures are necessary. For example, it is important to create a framework within which the target’s personnel understand clearly what information is being sought, and are comfortable that its business information is being understood. This typically means conducting meetings with relevant operational personnel present on both sides at which the diligence process is explained, operational teams are assigned and diligence requests and issues are reviewed. Another key factor in obtaining quality diligence information is building relationships between operational personnel of the acquirer and target. Finally, expecting and looking for the unexpected during the diligence process is crucial. For example, it is important to identify significant customers or vendors who may not be readily identifiable as affiliates of the target shareholders. These parties should be identified so that the acquirer can assess whether revenues or cost savings can be reasonably expected to continue after the acquisition has been consummated and the purchase price has been paid.


We believe PRC Antitrust issues will become extremely important in the coming years as the Chinese market matures and category consolidation continues to accelerate. The M&A Rules already provide a skeletal framework of regulation within which acquirers and targets must operate and make filings to MOFCOM in connection with domestic and offshore acquisitions. However, certain acquirers have taken the view that the fact that MOFCOM is not responding to antitrust filings is a signal that filings need not be made. We take the view that if the transaction triggers a filing requirement under the M&A Rules, best practices dictate that the proper filings are made. As preparation of the filings, gathering the necessary data, and consulting MOFCOM authorities may take time, acquirers are well advised to consult counsel early in the process so that antitrust issues do not result in any delays and can be factored into the convergence of regulatory views among the target and acquirer described above.


Often pricing is based on a multiple of EBITDA or similar formulae based on pre-tax profits of the target from prior periods. The combination of the unpredictability of certain industries, opaque regulatory environment and the disclosure climate underscore the critical importance of post-closing purchase price adjustments wherever possible. At a minimum, targets should be required to stand behind projections for future financial periods in the form of representations and warranties. To mitigate such risks, the acquirer should seek phased purchase price payments with adequate holdback rights and escrow reserves in the event adjustments are necessary. Other special accounting/pricing issues that can come up in the China M&A context include the following:

  • It may be difficult to achieve written comfort from accountants at the closing of an acquisition that the target’s financial results may be consolidated with the offshore acquirer where the target’s businesses are not owned through direct share ownership, but are controlled by contract.
  • Accountants may have differing views of the propriety of the tax status of the target. Often this results in a discussion of whether the target is eligible for certain tax holidays and therefore whether the benefit should be reflected in the audited financials—and thus the purchase price.
  • Since Chinese companies often recognize revenue based on receipts, the application of GAAP or IFRS revenue recognition policies can trigger a restatement of the Company’s revenues. A target should be required to grant the acquirer a right to audit the financials upon which the target’s valuation was derived and permit purchase price adjustments in the event restatements are necessary.
  • Many Chinese companies do not make adequate contributions to statutorily-mandated social insurance, welfare and housing funds. The acquirer should work closely with PRC accountants to identify potential underpayments. As remedial measures may include the adjustment of employee salaries, the acquirer should obtain covenants of the target to implement such remedial measures with its employees.

Each transaction is unique, and the foregoing observations are provided to illustrate the issues that foreign acquirors often face in a China acquisition. Sophisticated buyers are well advised to consult experienced counsel early to reduce the risk of regulatory or other roadblocks later and help to ensure timely execution and closing.

Bidding on Companies that Have Announced Merger Agreements: The Practical Limits of Deal Protection Measures

By Michael G. O’Bryan

Signing a merger agreement does not always end the bidding for a target company. The announcement of a merger agreement focuses outside attention on the target company and the transaction. Other parties, in the U.S. and abroad, may be attracted to the target or may be concerned about the competitive impact of the acquisition of the target by the original acquiror, and accordingly may make their own offers to acquire the target (often referred to as "topping" or "jumping" the original acquiror’s deal). Recently, for example, CNOOC made an offer for Unocal after Unocal announced a merger agreement with Chevron, and Haier America, together with two U.S. private equity firms, made an offer for Maytag after Maytag announced a merger agreement with another U.S. private equity firm. Neither of those offers was accepted, although Maytag ultimately terminated its original merger agreement to accept an offer from yet another bidder, Whirlpool.

The time between signing an agreement and actually closing the acquisition of a U.S. company, particularly a U.S. public company, usually is at least 4 to 6 weeks and more typically runs 2 to 4 months or more. Disclosure materials for the target’s shareholders must be prepared and, for public targets, submitted for review by the Securities and Exchange Commission, and then distributed to shareholders. Regulatory processes may be required, including most prominently Hart-Scott-Rodino antitrust review and in some cases national security review by the Committee on Foreign Investment in the U.S. Other factors also may affect timing, such as whether the acquiror is using any stock in its bid. During this period – after signing and announcement but before the actual closing – other parties can scrutinize the transaction and any public disclosure materials and decide if they want to make their own offers.

A buyer that has signed a merger agreement, of course, would prefer to prohibit the target company from entertaining alternative offers. The target’s board of directors, however, has a continuing obligation to its shareholders under fiduciary duty principles to seek the best course of action for its shareholders. These fiduciary duties limit the contractual restrictions that a target can accept. The contractual restrictions on a target’s ability to seek or accept alternative offers are called "deal protection measures" or "lock-up provisions." If a target board accepts too many restrictions, a court may find that the board violated its duties and may refuse to enforce the restrictions on behalf of the acquiror.

This article reviews some of the relevant fiduciary duties imposed on boards and some of the most common deal protection measures. The principal deal protection measures from the April 2005 merger agreement between Unocal and Chevron are noted for purposes of illustration.

Board Fiduciary Duties

General Duties

Target company directors must comply with the fiduciary duties imposed by state corporate law. (This article focuses on Delaware state law because of the high percentage of public companies incorporated under that state’s law and hence subject to its corporate governance requirements.) The general duties of a director are to act with due care and loyalty to the company and its shareholders. Recent court cases in Delaware also have emphasized the duty of directors to act in good faith.

The duty of care is particularly important when considering deal protection measures. This duty requires that directors act on an informed basis after due consideration of relevant materials and information. While it is not always clear exactly when the duty terminates, it is clear that it does not terminate when the company signs an acquisition agreement. Directors must continue to act on an informed basis with respect to actions such as recommending the transaction to the company’s shareholders. Deal protection measures that are overly restrictive, such as those that prevent directors from even considering or reviewing a potential competing bid, may be seen as interfering with the board’s obligation to make informed decisions and thereby giving rise to a breach of the duty of care.

Revlon Auction Duty

When selling control of the company, directors also have a duty to obtain the best price reasonably available for the shareholders. This duty was articulated by the Delaware Supreme Court in the 1986 case of Revlon v. MacAndrews & Forbes Holdings, and is often referred to as the "Revlon duty" or "auction duty" of directors. The Revlon duty in theory does not apply to stock-for-stock transactions, to the extent that control of the successor entity remains broadly dispersed in public hands. The Revlon duty thus applies most directly to transactions where the consideration is all or largely cash.

When the Revlon duty applies, directors must have some basis for determining that a particular deal represents the best price reasonably available. This can be done through a public auction of the company. However, courts have recognized that a public auction preceded by an announcement that a company is for sale may be severely disruptive for the company, and have allowed boards to proceed without auctions so long as the board has developed some body of reliable evidence with which to judge the transaction. Courts also may look to whether the contractual restrictions in the acquisition agreement preclude or unduly restrict another buyer from offering the target a better price and other terms. Holding the company open to such other offers is referred to as a "post-agreement market check."

Permissible Deal Protection Measures

A target board may agree to some measures to protect an acquisition transaction against a potential competing transaction. Generally this is done at the insistence of the acquiror, who refuses to proceed with a transaction the target board deems favorable unless the target gives it some assurance that the target is not using its transaction as a stalking horse to find a better deal. However, the protective measures typically must pass a two-part test: (i) the target board must have reasonable grounds to believe that a third-party bid would pose a threat to the company, and (ii) the measures adopted must be reasonable in relation to the threat. In a change of control transaction courts also will review the measures to confirm they are consistent with the board’s Revlon duty.

Determining the relative reasonableness of the deal protection measures involves a highly fact-specific review. Courts will investigate the process by which a target board determined to agree to a particular transaction and the deal protection measures, as well as the process by which a competing bidder would be able to approach the company. For example, a board that is relying on a post-agreement market check will not be able to adopt deal protection measures as strict as those that could be adopted by a board that conducted a full auction of the company before executing the acquisition agreement.

The 2003 Delaware case of Omnicare v. NCS Healthcare provides an example of the limits on permissible deal protection measures. In Omnicare, the Delaware Supreme Court found that the directors of a target company had violated their fiduciary duties when they approved a stock-for-stock merger agreement under circumstances that guaranteed stockholder approval of the agreement. Stockholders holding a majority of shares had agreed with the buyer to vote to approve the agreement, and in the merger agreement the company agreed to hold a stockholders’ meeting even if the company board later withdrew support for the transaction. The Court concluded that the measures made it "mathematically impossible" for any other offer to succeed, even if more favorable to the stockholders, and that the measures thus were not a reasonable response to the threat of losing the initial transaction. The Court found the provisions to be in violation of the board’s duties and refused to enforce them on behalf of the original buyer. The Omnicare decision has been criticized, but it still stands for the proposition that the shareholder vote for a transaction cannot be entirely locked up.

Common Deal Protection Measures

There are many different types of deal protection measures. A company hoping to displace an acquiror that has signed an acquisition agreement with a target must review the acquisition agreement and related documents carefully to see what measures have been adopted and the most effective way of approaching the company and its shareholders.1

Some of the most common deal protection measures are discussed below.

No-Shop Clause

Almost all acquisition agreements prohibit the target from actively seeking other bids. These provisions, known as "no-shop clauses," prohibit the target from soliciting, providing information to, or otherwise encouraging other potential acquirors. They typically apply as well to sales of assets by the company, and so would apply even to a proposed acquisition of less than the entire company.

The Chevron/Unocal transaction provides one example of a no-shop clause.

To accommodate the fiduciary obligations described above, however, a no-shop clause typically includes a "fiduciary out" that allows the target board to furnish information to or negotiate with a third party that makes an unsolicited proposal. Most such clauses require the target board first to make an affirmative finding that the unsolicited proposal is superior to the original transaction (or is reasonably likely to result in a superior proposal).

The target board typically also must conclude that the unsolicited transaction is reasonably likely to be consummated, which requires the target board to review a number of factors, such as the ability of the alternative bidder to finance its proposal, if applicable, and any potential regulatory hurdles. Most such clauses also require the board to determine that its fiduciary duties require it to take such actions. The Unocal agreement, for example, requires the board to determine that a competing proposal is, among other things, "reasonably likely to be consummated on the terms ... proposed, taking into account all legal, financial, regulatory and other aspects of such proposal" before it can exercise its rights under the fiduciary-out provision.

The target board typically also must give the original acquiror notice of the inquiries the board receives from other potential acquirors as well as the steps it is taking with respect to such inquiries.

A no-shop provision binds the target company, and as such does not prevent another company from appealing directly to the target company’s shareholders, such as by launching a tender offer or proxy campaign. However, a no-shop provision may make it difficult to get the target company’s assistance in closing the tender offer.

Termination Fee

One of the most common deal protection measures is the termination fee (also called a break-up fee). Under this measure, the target agrees to pay the original acquiror a substantial sum of money under certain circumstances if the transaction is terminated and not closed. A typical clause may require the fee to be paid if:

  • the target board elects to terminate the acquisition agreement in order to accept a competing offer (assuming the agreement allows the target company to do so),
  • the target board publicly changes its recommendation and the original acquiror elects to terminate the merger agreement rather than proceed with the shareholder vote, or
  • the original bid fails for some other specified reason, such as being voted down by the shareholders, after a competing proposal has been announced, and a competing proposal is agreed to or closed within a specified period of time (typically 6-12 months).

The termination fee can be quite large in absolute terms. In the Chevron/Unocal transaction the termination fee could be as much as US$500 million; to accept the subsequent bid from Whirlpool, Maytag had to pay US$40 million to the original acquiror. However, courts will assess the reasonableness of the fees under the fiduciary principles noted above. While there is no bright line, fees often are in the range of 2-4% of the transaction’s equity value. The validity of the termination fee depends on a number of factors, including the size of the transaction, the restrictiveness of other deal protection measures, and the degree to which the target company was shopped prior to signing the original acquisition agreement.

"Force the Vote" Clause

A target board must recommend an acquisition agreement before it is submitted to the shareholders for approval. However, once the board has recommended the acquisition, the board can submit the acquisition agreement to the shareholders even if the board subsequently withdraws or changes its recommendation, such as where another bid has surfaced or other circumstances have changed. Some agreements thus require the board to submit the acquisition agreement to the shareholders, even if the board has changed its recommendation. Unocal agreed to such a provision in the Chevron/Unocal transaction.

Once the board has changed its recommendation, the shareholders are more likely to vote against the transaction at the shareholder meeting. If the transaction accordingly is not approved, the primary effect of a "force the vote" provision will be on timing—the target could take 2 to 4 months to hold its shareholder meeting, and the target will not be able to take significant steps towards other transactions during that time. The target also will have to pay costs associated with the shareholder meeting. Such delays and costs could have a significant impact on the attractiveness of the target to competing bidders.

Shareholder Voting Agreements

Shareholders generally have the right to sell or vote their shares as they please. However, company boards must be aware of steps that shareholders have agreed to take on behalf of potential acquirors, and the effect that such steps may have on other potential bidders. Acquirors often seek to have significant shareholders of a target agree at the time an acquisition agreement is signed to vote their shares in favor of the acquisition. Such agreements of course are most effective in companies with relatively concentrated shareholdings, since such shareholdings make it easier for the acquiror to get closer to the vote required to approve the acquisition (generally 50% of the target’s outstanding shares, although in companies with more than one class of stock outstanding there also may also be a required class vote). U.S. federal securities rules may limit the types of shareholders a buyer can approach prior to the formal shareholder solicitation. The Chevron/Unocal transaction does not involve any disclosed shareholder voting agreements, presumably since no one shareholder holds a very significant portion of Chevron’s shares.

The specific provisions of a voting agreement can vary, although as noted above under the Omnicare decision voting agreements cannot be used to completely lock up a transaction. Many voting agreements terminate upon the termination of the acquisition agreement. Some more powerful agreements, however, prohibit the shareholder from voting to approve any competing bid for a specified period of time after the acquisition agreement is terminated. The so-called "profit sterilization" provision also is becoming more popular. This provision requires the shareholder to give to the initial buyer some or all of the additional profit realized by the shareholder if the company ultimately is sold to a competing buyer.

Quick Shareholder Vote

The target board’s fiduciary duty to consider or to be able to accept competing bids typically is seen as lasting only through the shareholder vote. Accordingly, the sooner the target shareholders vote, the quicker the original acquiror permissibly can cut off the target board’s ability to consider other transactions, even if closing of the transaction may be delayed for regulatory or other reasons. Conversely, where a company has not been the subject of a vigorous auction process prior to signing the original acquisition agreement and directors are relying on a post-agreement market check, it may be necessary to allow more time than the statutory minimum before obtaining shareholder approval and closing the transaction.

This measure applies more typically to private companies than to public companies. As noted above with respect to voting agreements, it may be difficult to approach the holders of sufficient shares of a public company, and further many public companies have eliminated or restricted the ability of shareholders to act without holding a formal meeting. However, if the target company has a few large shareholders that could provide the necessary vote, it may be possible for those shareholders to act by written consent soon after the acquisition agreement is signed.

Stockholder Rights Plan

If a target company has a stockholder rights plan (commonly known as a poison pill), the buyer may require the target to agree not to redeem it on behalf of any other potential acquiror. If the target company does not have a stockholder rights plan, the buyer may require that it adopt one. The stockholder rights plan effectively prevents any other party from acquiring more than a specified percentage of the target’s outstanding securities without getting the target board to redeem the plan, and so prevents other bidders from launching (or at least from closing) tender offers made directly to shareholders. The target board must make its decision regarding redemption of the plan based on its fiduciary duties and may be required ultimately to redeem the plan in favor of a competing bidder. Nonetheless, the plan can discourage competing buyers and ensure that they approach the board before acquiring a significant stake in the target company.


A target company that has announced a merger agreement may become an appealing target for other potential acquirors. Those potential acquirors, however, need to review the announced transaction and applicable law carefully to determine the most appropriate method for approaching the target, as well as the potential costs and risks involved. Target companies also have incentives to keep looking for better offers, but they must do so within the procedures prescribed in their original merger agreements to avoid risking the original transaction. Potential acquirors seeking to contact companies that have announced merger agreements with third parties should work carefully with their advisors to maximize the potential for a successful transaction.


1. For a public company target, or for a private company being acquired by a public acquiror where the acquisition is material to the acquiror, the acquisition agreement must be filed with the SEC on a Form 8-K within four business days of the date of signing. If there is a shareholder voting agreement, it is likely to be filed as well by the target company or by the acquiror on its own filing with the SEC. The target also will file a proxy statement (for a merger) or a recommendation statement (for a tender offer) with the SEC that describes, among other things, its rationale for entering into the agreement and the process by which the agreement was negotiated. Documents filed with the SEC can be easily obtained via the Internet at the SEC’s EDGAR webpage,

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.