Answer ... The Anti-monopoly Bureau of the State Administration for Market Regulation (SAMR) envisages a two-stage process for reviewing concentrations:
- a 30-calendar-day ‘preliminary review’; and
- a potential ‘further review’ of up to an additional 90 calendar days, which can be further extended by another 60-calendar-day advanced review.
Under the simplified filing and review procedure, the SAMR generally grants merger clearance within the 30-day preliminary review period after formally accepting the filing, if the transaction does not give rise to competition concerns.
Once the parties have submitted the filing, the SAMR may spend around one to two months undertaking an initial review before formally accepting the notification and initiating the substantial review process. During the informal initial review stage, the SAMR will mainly examine whether the format of the filing is correct and whether all required information and documents have been provided. Only once it has found that the filing is satisfactory will the SAMR formally accept the case and start the formal review process.
Set timeframes for the case team and the parties in relation to making and responding to supplemental requests for information are to be introduced by amendments to the Measures for Review of Concentrations between Undertakings. In practice, the SAMR makes information requests within five days of receiving the filing.
Answer ... The Chinese merger control regime includes no provisions on accelerating the timetable for review. However, in practice, the filing party may address time-sensitive concerns informally by submitting letters to the SAMR or requesting face-to-face meetings.
Notably, it is crucial to provide the SAMR with complete and accurate information, in order to speed up the merger review process. In addition, timely and effective responses to requests for information and follow-up questions raised by the case handler will be valuable for the review.
The current Chinse merger control regime does not entitle the SAMR to suspend the timetable for review.
Answer ... Yes, the Chinese merger control regime introduced a simplified review process in 2014. One of the following criteria must be met in order to apply for a simplified review:
- The combined market shares of all undertakings involved in the concentration in the same relevant market are less than 15% in total;
- The market shares of the undertakings involved in the concentration, which have a vertical relationship, are less than 25% in the upstream and downstream markets;
- The market shares of the undertakings involved in the concentration, which neither operate in the same relevant market nor have a vertical relationship, are less than 25% in each market related to the transaction;
- The undertakings involved in the concentration establish a joint venture outside China which does not engage in business activities in China;
- The undertakings involved in the concentration acquire shares or assets of overseas companies which do not engage in business activities in China; or
- A joint venture jointly controlled by two or more undertakings will be controlled by one or more undertakings through the concentration.
Answer ... In reviewing high-profile transactions, the SAMR may cooperate with its counterparts in other jurisdictions. In doing so, the SAMR may request the filing parties to waive confidentiality restrictions, so that it can disclose information obtained from them during the review process with and/or receive information from its counterparts.
Answer ... Prior to formal acceptance, the SAMR may request further information if it finds that the notification documents or materials are incomplete. Once the case has been officially accepted, the SAMR will have broader powers to gather information from the filing parties, competitors, upstream and downstream enterprises, industry associations, experts and relevant government agencies.
If the information provided by the filing party is found to be inaccurate or misleading, the SAMR is entitled to order the filing party to provide correct/accurate information and the parties may face a fine up to RMB 1 million.
Answer ... Generally, the SAMR, at its own discretion, may consult with third parties, including competitors, upstream and downstream enterprises, industry associations, experts and relevant government agencies. In practice, stakeholders are allowed to submit opinions, comments and feedback to the SAMR on their own initiative.
Notably, as regards the simplified review, after the case has been officially announced, any third party is entitled to submit comments to the SAMR.
Answer ... No. It is not possible to close a cross-border transaction by carving out local completion prior to clearance by the SAMR.
Answer ... For the purpose of merger assessment, the SAMR will consider whether the transaction would have the effect of eliminating or restricting competition. However, if the filing party can prove that the pro-competitive effects of the transaction would outweigh the anti-competitive effects, or that the transaction is in the public interest, the authority may decide not to block the transaction.
In assessing the competitive effects of a merger, the SAMR shall consider factors including:
- the parties’ market shares or power in the relevant market;
- the concentration level in the relevant market;
- the implications of the transaction for market entry or the development of technology;
- the impact on consumers and other business operators; and
- the impact on the national economy.
Answer ... No, the same substantive test applies to joint ventures.
Answer ... In general, the theory of harm considered in the substantive assessment is whether the transaction would give rise to or strengthen a business operator’s capacity and motivation to eliminate or restrict competition, and the probability of this happening. With regard to horizontal mergers, the assessment is primarily of unilateral effects and coordinated effects. With regard to non-horizontal mergers – that is, vertical and conglomerate mergers – in addition to coordinated effects, the assessment is primarily on the foreclosure effects, both upstream and downstream.
Non-competition related issues, such as labour and social issues, will not be considered.