New merger rules aim to speed up review process

The Ministry of Commerce has published draft rules designed to streamline merger review processes. The "simple case draft" aims to facilitate the ministry's anti-monopoly pre-merger reviews by categorising certain cases as "simple ones" that may result in quicker approval.

A transaction will be classified as a simple case if:

• within the same relevant market, the combined share of the business operators in the deal is less than 15 per cent;
• there are upstream or downstream relationships among the business operators but their cumulative share in either the upstream or downstream market is less than 25 per cent;
• there are no upstream or downstream relationships among the business operators but their cumulative share in each of the markets is less than 25 per cent;
• the business operators are establishing a joint venture outside China, but that venture will not engage in any business activities in the country;
• the business operators are to acquire the interest or assets of an offshore company, but that company does not and will not engage in any business activities in China; or
• a joint venture currently under joint control of more than two business operators will be controlled by one or more of the operators after the deal.

Three of such circumstances are based on the market share of the business operators in the transaction while the others focus on the proposed deal's impact on the economy in China.