MOFCOM Issues Amended Merger Notification Form
MOFCOM has just published the amended Notification Form of Anti-Monopoly Review for Concentrations of Undertakings, which will take effect as of 7 July 2012. The new form will have a material implication for any upcoming merger notification which cannot be formally submitted before 7 July.
We have prepared a preliminary English translation of the amended notification form and its endnotes.
Below are some highlights in the amended notification form:
MOFCOM’s effort to further standardize notification content/format with the aim of reducing supplemental information requests before case docketing
Encompass wide scope of information and require detailed competition analysis (containing 50 endnotes)
Pure Holdco/SPV not proper notifying party (Endnote 3)
If certainty of the transaction can be ensured, other documents (such as framework agreement, tender documents) may be submitted in lieu of executed definitive transaction documents(Endnote 23)
Concept of “neighboring market” is clarified (Endnote 37)
Explicitly requires the use of HHI/CRn in competition analysis (Endnote 39)
Implicitly request information on ongoing global antitrust investigation (Endnote 46)
Explicitly mandate the disclosure of other outstanding regulatory non-compliances (such as establishment, operating, foreign investment, industrial policy) (Endnote 49)
Compared to the previous form, the amended form (along with its 50 endnotes) explicitly requests for broader and more detailed information upfront (such as competition analysis using HHI/CRn, detailed information concerning suppliers/customers). This will make the pre-submission information collection process more challenging/time consuming and require an earlier start on the information collection process. However, we see in the form and accompanying endnotes the distillation of MOFCOM’s experience to-date in dealing with common procedural/substantive issues arising from the notification process. It also clarifies a number of important issues in connection with the merger notification.
Therefore, after a notifying party submits the amended form which is prepared in compliance with the MOFCOM guidance contained in the endnotes, we expect that the number of MOFCOM’s supplemental information requests (a time-consuming bottleneck before case docketing) will be reduced, and the overall time for MOFCOM to docket the case and complete the merger review will be shortened, especially for mergers without significant competition concerns. However, if any of the parties to a transaction has ongoing antitrust investigation/other material PRC regulatory non-compliance issues, the case-docketing time could still be significantly longer than usual.