Hong Kong: Further Developments In Chinese Merger Control To Welcome In The New Year

Last Updated: 12 January 2009

Article by Martyn Huckerby, Kien Choong and Alex Yang

The Chinese Ministry of Commerce's Anti-Monopoly Bureau (AMB) has issued a series of guidelines on the merger review framework and process, including guidelines on the information required by the AMB about transactions that must be notified to the AMB in accordance with the compulsory pre-merger notification regime under the PRC Anti-Monopoly Law (AML). The AMB has also commenced a consultation on three draft guidelines on:

  • market definition
  • investigating transactions that have not been notified to the AMB in contravention of the compulsory pre-merger notification regime, and
  • proactively investigating transactions that do not meet the merger notification thresholds but may nevertheless eliminate or restrict competition.

The new guidelines issued by the AMB, while broadly similar to the AMB's current practices, provide greater certainty regarding the filing process. Collectively, the published guidelines (including draft guidelines issued for consultation) suggest that the AMB will be taking an increasingly activist role in relation to mergers and acquisitions involving businesses in China. In particular, the AMB may proactively investigate transactions that have not been notified to the AMB, including transactions that do not meet the pre-merger notification thresholds under the AML. Firms with investments in China that are contemplating a merger or acquisition should have a comprehensive regulatory strategy early in the process and allow time for the AMB clearance to be obtained.

Background and guidelines

In January 2009 the AMB issued a series of four guidelines outlining the merger review framework and process, and the information that parties must submit when notifying the AMB of a transaction in accordance with the compulsory pre-merger notification regime under the AML, and clarifying the procedures the AMB will adopt when undertaking that review. In general, these guidelines are broadly similar to the March 2007 Guidelines on Anti-monopoly Filings for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors published by the Ministry of Commerce (2007 Guidelines). The four documents issued by the AMB in January 2009 are:

  • "Guidelines for Merger Review" (1 January 2009) - outlines the AMB's merger review framework
  • "Flow Chart for Merger Review" (1 January 2009) - illustrates the AMB's merger review process in an easily digestible form
  • "Guidelines on Declaration of Concentration of Business Operators" (gazetted on 7 January 2009) - provides an overview of the requirements for pre-notification consultation with the AMB and the documentation necessary for a successful merger filing, and
  • "Documentation Guidelines for Declaration of Concentration of Businesses" (gazetted on 7 January 2009) - outlines the information and documentation filing parties must submit to the AMB with a merger filing. These guidelines also annex a template merger filing form that parties may use in preparing the notification.

MOFCOM's merger review process

The AMB's merger review process, as described in its guidelines, can be summarised as follows:

Phase Authority in charge Description Timing
Pre-notification consultation AMB The filing party should submit a written application seeking an appointment with the AMB, which should cover the details of the applicants, subject matter of the application, the transaction, issues to be discussed and the contact information Filing party's discretion
Filing AMB's Administration Service Centre Formal filing submitted to the AMB Once the information required to be submitted with a filing becomes available
Preliminary review AMB The AMB undertakes a preliminary review of the documentation. The AMB may reject the formal filing if incomplete or inaccurate documents have been submitted, or if material information has been concealed AMB's discretion
Phase 1 substantive review AMB The AMB reviews the information submitted and determines if further review is required 30 calendar days
Phase 2 substantive review AMB In certain circumstances, the AMB will carry out a more detailed review (for example, where a transaction raises substantive issues). We understand that the AMB's review of Coca Cola's proposed acquisition of Huiyuan Juice may currently be subject to Phase 2 review 90 calendar days (unless extended)
Decision and publication AMB/Ministry of Commerce (MOFCOM) Senior officials of MOFCOM will make a decision on the proposed transaction and, if the transaction is prohibited or conditions are imposed, the decision will be published AMB's discretion

Merger filings - information requirements

The guidelines issued by the AMB clarify the information that parties must give when notifying the AMB of a transaction. That information includes:

  • information about the parties to the transaction, including business licences, approval certificates, and registration documents (which must be notarised in the case of foreign enterprises)
  • details of the transaction and a copy of relevant agreements
  • analysis of the effect of the transaction on competition in relevant markets, including details of market participants and their market shares, turnover information, marketing strategies, and details of customers and suppliers
  • the effect of the transaction on market structure, competitors, other operators, consumers, technology development, economic development and public interest;
  • details of relevant industry associations, and
  • other information that must be disclosed to the appropriate authorities where the parties are going into bankruptcy or where the transaction involves national security, industry policy, state-owned assets, or famous trademarks.

While the information outlined above is broadly similar to that contained in the 2007 Guidelines, there are some notable differences, including the following:

  • the AMB has confirmed that information about possible efficiencies achieved by the proposed concentration is relevant to its analysis
  • internal or external analyses and reports which help evaluate the proposed concentration are considered relevant by the AMB, such as feasibility study reports, due diligence reports, and research reports, and
  • filing parties are now asked to clarify the possible impact on the parties and the relevant market if the proposed transaction is prohibited by the AMB.

The guidelines also provide some insight into the factors that the AMB will take into account when it reviews proposed transactions. In particular, the AMB may now require the filing parties to provide to the AMB the opinion of local government, feedback from the public, and information regarding the possible social effect of the transaction.

Draft guidelines published for consultation on market definition and investigating transactions that have not been notified to the AMB

MOFCOM has issued the following draft guidelines for consultation:

  • "Guidelines for defining the relevant market" - outlines the way in which the authorities will define the relevant market for the purposes of merger control as well as other provisions of the AML (such as the provisions relating to abuse of dominant market position)
  • "Interim Measures for Investigating and Disposing of Suspected Concentration of Undertakings Failing to File Notification in Accordance with the Law" - provides details of the measures the AMB will take to investigate transactions that have not been notified in contravention of the compulsory pre-merger notification regime, and
  • "Interim Measures for Collecting Evidence on Suspected Monopolistic Concentration of Undertakings below the Thresholds" (Investigation Guidelines) - describes the circumstances in which the AMB may investigate transactions that may eliminate or restrict competition even though the transactions do not exceed the thresholds for merger notification.

The Investigation Guidelines may have greatest impact on firms with investments in China that are contemplating a merger or acquisition. While the Rules and Notification Thresholds for Concentrations of Undertakings authorises the AMB to review transactions even where the merger thresholds are not met, it was previously unclear whether the AMB would exercise this power. The Investigation Guidelines, if adopted, suggest that the AMB intends to proactively investigate transactions that are not notifiable under the merger control regime in a broad range of circumstances, including where there is negative public reaction to a transaction. Merging parties should prepare for such possible intervention by the AMB when entering into transactions involving businesses in China.


The guidelines issued by the AMB clarify the merger control procedures it will follow when reviewing transactions under the AML. The guidelines also include a helpful merger filing template for use by filing parties. It is clear from these guidelines that the AMB requires a substantial amount of information and documents prior to accepting any merger notification for review. There is still uncertainty though regarding a number of key issues relating to the application of the AML, including whether and how the AMB will apply the AML to joint ventures and how turnover should be calculated. We anticipate that further guidelines addressing these issues will be published in due course, as suggested by the distribution of the additional draft guidelines for consultation. In the meantime, firms should be prepared for potential intervention by the AMB in respect of transactions that do not meet the pre-merger notification thresholds under the AML.

The views set out in this publication are based on our experience as international counsel representing clients in their business activities in China. As is the case for all international law firms licensed in China, we are authorised to provide information concerning the effect of the Chinese legal environment. However we are not admitted to practice Chinese law and so are unable to issue opinions on matters of Chinese law.
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 Mondaq.com.

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

Mondaq.com (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 www.mondaq.com

To Use Mondaq.com 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