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China: Regulators causing headaches for big-time mergers

By  |  May 2, 2013

International lawyers and advisers have switched their focus from US and European antitrust regulators to those within China as competition watchdogs maintain a firm obstacle to merger approval. According to one analyst, mergers are often delayed due to the nation’s anti-monopoly law, passed just five years ago. As companies look to expand in the globe’s second-largest economy, multi-billion dollar mergers are at stake as recently-implemented legislation reworks the system. Regulators in Beijing, for example, only recently approved of a $5.6 billion acquisition of US-based grain company Gavilon by Japan-based Marubeni Corp., which endured a year-long review. Additionally, Chinese regulators forced steep divestures upon Glencore in its $30 billion buyout of Xstrata after a 14-month battle. According to some analysts, the difficulty of Chinese antitrust regulators may stem from their tendency to focus on industrial policy protection, rather than consumer protection, when reviewing merger cases.

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