Answer ... The State Administration for Market Regulation’s (SAMR) review process can be divided into two main phases:
- the pre-docketing review; and
- the post-docketing review.
Pre-docketing review: Upon receiving the initial notification package, SAMR starts a pre-docketing review to check whether all the necessary information and documents are provided. If they find any important information missing, they will request additional information from the notifying parties. The parties are then expected to respond to these requests within a specified period – usually one or two weeks. Multiple rounds of supplementary submissions might be needed before SAMR officially accepts the case. Once the parties have provided comprehensive responses to all the requests, SAMR issues a case docketing notice, marking the start of the post-docketing review, which is explained below.
The timeframe for the pre-docketing review is not specifically defined by law and can vary significantly, ranging from several weeks to several months. This variation depends on factors such as:
- the complexity of the case; and
- the completeness of the materials submitted.
Post-docketing review: The post-docketing review consists of three stages:
- Phase I (up to 30 days);
- Phase II (up to 90 days); and
- Phase III (up to 60 days).
The application of these stages in a specific case depends on whether the notification is submitted under the simplified procedure or the normal procedure.
Simplified procedure: SAMR introduced the simplified procedure in 2014 to expedite eligible notifications. It applies to transactions that meet the following criteria:
- horizontal mergers where the combined market share of all parties is less than 15% or in vertical mergers, if each party’s market share in both the upstream and downstream markets is less than 25%. For mergers without horizontal or vertical overlaps among the parties, none of the parties should hold a market share of 25% or more within any relevant market;
- the formation of offshore joint ventures that will not operate within China or the acquisition of offshore targets not engaged in business activities within China; and
- the acquisition of a controlling stake in a joint venture by an existing controlling shareholder.
In these cases, parties can request the application of the simplified procedure in their initial notification. During the pre-docketing review, SAMR assesses whether the notification meets the criteria. If it does, SAMR makes a public announcement about the case for 10 days after the case is docketed. During this period, anyone can submit objections or comments regarding the case to SAMR. If no objections are raised, SAMR is likely to clear the case within a few days, typically during Phase I. If an objection with valid arguments is raised, SAMR engages with the parties to address the concerns, possibly transitioning the case into Phase II. If SAMR finds that the notification does not meet the criteria for the simplified procedure, it will withdraw the case docket and ask the parties to make a new filing under the normal procedure.
Normal procedure: Under the normal procedure, SAMR not only conducts its own analysis but also actively seeks input from various stakeholders, including government agencies, industry associations, competitors, customers and suppliers. Cases with no significant competition concerns under the normal procedure typically receive clearance during the later part of Phase II, usually within two to three months of the case being docketed. However, if substantial competition concerns arise, the review process can be extended and may even progress to Phase III.