Originally published August 7, 2008
Keywords: China, anti-monopoly law, AML, filing thresholds, merger control regime, concentration
China's new Anti-Monopoly Law (AML) took effect on August 1, 2008. Two days later, China's State Council introduced final implementation regulations setting forth notification thresholds under the AML's merger control regime. As predicted in our Client Alert of July 31, 2008, " China's Anti-Monopoly Law — New Merger Filing Thresholds Anticipated," the final regulations omit a controversial market share-based notification test that had been included in a previously published draft, and retain two turnover-based notification tests (however, with newly increased turnover threshold levels).
Under the final regulations, notification of a transaction that qualifies as a "concentration" under the AML will be required if either of the following thresholds is met:
|
The regulations expressly contemplate that special rules will be developed for calculating the turnover of undertakings involved in such industries as banking, insurance, securities and futures. Apart from this, no direction is provided in relation to how a party's turnover should be calculated or, in particular, the extent to which turnover of the party's broader corporate group is to be included.
As with the determination of which transactions qualify as "concentrations," and when and how the notification of such determination needs to be made, it seems that the turnover calculation will require consultation with China's officials in many cases until such time as further implementation rules are introduced. Guidance may also be able to be taken from how such matters are handled under China's pre-existing merger control regime (which the AML regime is effectively assumed to replace).
Please refer to our Client Alert of July 31, 2008, for further commentary relating to application of the threshold tests outlined above, and the broader implications of the AML's commencement.
To assist in understanding the new law's scope and to keep you updated on the compliance and enforcement impacts arising from the law's enactment, Mayer Brown has developed a resource site that will be continuously updated with articles and other information as the issues around China's Anti-Monopoly Law evolve. You can view our "China's Anti-Monopoly Law" Resource Page at: http://www.mayerbrown.com/publications/article.asp?id=5330&nid=6 .
Copyright 2008. JSM, Mayer Brown International LLP and/or Mayer Brown LLP. All rights reserved. Mayer Brown is a global legal services organization comprising legal practices that are separate entities ("Mayer Brown Practices"). The Mayer Brown Practices are: JSM, a Hong Kong partnership, and its associated entities in Asia; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; and Mayer Brown LLP, a limited liability partnership established in the United States. The Mayer Brown Practices are known as Mayer Brown JSM in Asia.
This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein. Please also read the JSM legal publications Disclaimer.
