Thursday, 30 May 2013

China Updates- Anti-Monopoly Law (AML)

In April, MOFCOM gave conditional approvals to two acquisitions involving overseas groups. The first wasthe acquisition by Glencore Group of the remaining shares of Xstrata plc., i.e. those which it did not already hold.

The second was the acquisition by Marubeni of Gavilon Holdings. Both involved strategically-sensitive global
markets where China is highly dependent on imports.

In the first case, MOFCOM sought (after very lengthy consideration) for the first time extraterritorial divestiture of assets as a condition of approval. Given that the anti-monopoly arguments were not strong, the decision appears to be strongly policy-influenced.Likewise, in the Marubeni case, MOFCOM subdivided the markets for consideration to include a separate market for imports, once again based on figures which would not in themselves have created a strong overall AML case. This again suggests that policy or strategic influences are at play, and that these will continue to be key factors.Again, in the Marubeni case, MOFCOM included extra-territorial conditions in its approval, reflecting its increasing confidence in its role.

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