China: Chinese Merger Review Receives Its First Toast: InBev And The New Anti-Monopoly Law

Last Updated: 3 December 2008
Article by Martyn Huckerby

On 18 November 2008, the Chinese Ministry of Commerce (MOFCOM) announced that it has cleared the acquisition by InBev N.V./S.A. (InBev) of Anheuser Busch Companies Inc. (A-B), the largest transaction it has yet considered under China's new Anti-Monopoly Law (AML). The parties announced that the transaction had closed shortly thereafter.

MOFCOM's clearance decision provides the first real insight into its new merger review procedures under the AML, as well as how MOFCOM is likely to approach future transactions under the AML (especially as to the imposition of conditions). In particular, MOFCOM's decision suggests that it is prepared to adopt a more transparent approach than in the past, but that filing parties will need to plan their notifications carefully and allow additional time for the review process.

Background and merger review process

On 14 July 2008 InBev, the brewer of Stella Artois and Beck's beers, and A-B, the brewer of Budweiser beer, announced an agreement to combine the two companies (the Transaction), forming the world's leading global brewer.

InBev formally notified MOFCOM of the Transaction on 10 September 2008 in accordance with China's new merger control regime under the AML, which came into effect on 1 August 2008. Under the AML MOFCOM must be notified of transactions that meet specified turnover thresholds, and parties cannot close transactions until MOFCOM grants clearance. These turnover thresholds are set out in our previous alert. Companies that contravene the requirement to notify MOFCOM of mergers may be subject to penalties, including fines of up to RMB500,000 and divestiture orders.

Following InBev's notification, it provided supplementary materials to MOFCOM on 17 October and 23 October, before MOFCOM formally accepted the notification and commenced the 30 calendar day review period on 27 October. MOFCOM announced on 18 November that it had cleared the Transaction. While MOFCOM's decision was made well within the statutory clearance period, more than a month and a half elapsed in between the date of filing and the date on which MOFCOM accepted InBev's notification.

In making its decision, MOFCOM consulted extensively with other Government departments, the relevant beer industry association, major local beer brewers, suppliers and local distributors.

InBev also announced on 18 November that it had completed the Transaction, following approval from shareholders of both companies and has changed its name to Anheuser-Busch InBev. The Transaction has created one of the world's top five consumer product companies.

Conditions of clearance

In clearing the Transaction, MOFCOM imposed a variety of conditions on the new merged entity (Anheuser-Busch InBev). In particular, InBev must notify MOFCOM and obtain its consent before any of the following transactions are implemented:

  • increasing A-B's existing 27% shareholding percentage in Tsingtao Brewery
  • any change to the controlling shareholders of InBev or the shareholders of such controlling shareholders
  • increasing the existing 28.56% shareholding percentage in Zhujiang Brewery, and
  • purchasing any stake in China Resources Snow Breweries and Beijing Yanjing Brewery, two of the largest domestic brewers.

MOFCOM justified these conditions on the basis of the large scale of the acquisition and the resulting significant market share of Anheuser-Busch InBev in China.

Implications for businesses conducting mergers

In its first high profile application of the AML, MOFCOM has adopted a considered approach to the clearance process, demonstrating the important role that third parties will play in influencing MOFCOM's decisions. It is relevant to note that there has been public speculation that clearance of Coca Cola's proposed acquisition of Huiyuan Juice has been delayed due to the significant level of third party complaints.

MOFCOM's announcement in the current case suggests that it will be prepared to impose formal conditions and make announcements of such decisions, rather than informally settle with the parties behind the scenes to avoid public scrutiny. Under the AML MOFCOM is obliged to publish decisions blocking transactions or imposing conditions, but not other clearance decisions. The approach MOFCOM has taken here is a welcome development that, if continued, will provide greater transparency in relation to MOFCOM's procedures and, hopefully, more predictable merger decisions. In turn, this will make it easier for companies to make informed Chinese investment decisions.

However, MOFCOM's decision also shows that it will be willing to use the clearance process to ensure it can influence future developments in the relevant sector. Indeed, the conditions imposed on InBev relate primarily to InBev's future investment in the Chinese beer market and not to issues arising from the current acquisition.

Companies that are interested in acquisitions that meet the turnover thresholds (see our previous alert) should ensure they factor the notification and review periods into the transaction planning process, as well as carefully consider the way in which the transaction is described in public statements and internal documents on the assumption that they may become subject to MOFCOM review. Companies should also pay close attention to the implementation rules that MOFCOM is expected to publish shortly.

Source: MOFCOM Announcement, No. 95, 2008.

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.

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”

Related Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions