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Yanyan Yang on China’s Merger Control

 |  April 22, 2024

In this CPI Interview series, Sophie Yang, an economist with Compass Lexecon, interviewed Yanyan Yang of Latham & Watkins, a renowned multinational law firm specializing in antitrust and competition practice. Latham & Watkins’ expertise in this field had been consistently recognized with global elite rankings by leading antitrust publication CCR for 16 years.

Yang began by discussing recent developments in China’s merger control space, highlighting the significant progress in antitrust enforcement since the enactment of the anti-monopoly law in 2008. With revisions to the law in 2022 and updated rules on concentration of undertakings reviews, China has established an advanced system for merger control review, with SAMR demonstrating robust capacity in handling complex matters, including global merger control and antitrust investigations.

When asked about primary observations regarding China’s merger control enforcement, Yang noted that while approval was generally the norm, SAMR had been known to present challenges in some high-profile deals. She emphasized SAMR’s inclination towards behavioral remedies, aligning with its mandate under China’s Anti-Monopoly Law to protect not only market competition but also the country’s economic development. Yang also highlighted SAMR’s scrutiny of transactions in strategically important sectors such as semiconductor, pharmaceuticals, and agriculture.

Regarding the challenges of high-profile cases, Yang discussed the unpredictable nature of industrial policies influencing China’s review process. She cited SAMR’s recent decision on the Silicon Motion / MaxLinear deal, which departed from SAMR’s previous practices and sparked discussions within the Chinese antitrust community. Yang also addressed the impact of geopolitical tensions on the review process, particularly concerning critical technologies and evolving export control regulations.

On the topic of timeline challenges, Yang acknowledged SAMR’s extended review periods, particularly for high-profile deals. She discussed the average review time and notable outliers, noting the introduction of the stop clock mechanism has added further uncertainty to the timeline.

Yang provided strategies for maximizing the chances of getting through the review process, emphasizing proactive engagement with SAMR, allocation of ample time within merger agreements, and proactive communication with stakeholders. She also discussed the importance of analyzing potential remedies in advance and thinking creatively to address specific local industry concerns.

In conclusion, Yang highlighted the dynamic enforcement landscape, requiring parties and counsel to develop new tactics to navigate the review process successfully. She emphasized the importance of understanding SAMR’s preferences for remedies and engaging in dialogue early on to address concerns effectively.