Llinks has successively helped clients complete a number of declarations of concentration of undertakings in China since January 2019. The declarations involved both new joint venture projects and acquisition projects, while the fields and relevant markets covered include new energy vehicles and important parts, car rental, supermarket chains, environmental management, food processing, etc. These projects were all approved by the State Administration for Market Regulation (SAMR) in the first two weeks of 2019. According to the observation of Llinks lawyers, the following trends have been shown in the practice of SAMR's declaration reviewing of concentration of undertakings:
1. The efficiency of the review has been improved. Regarding cases where there is little competition concern, the reviewing pace of SAMR has been obviously accelerated, and the reviewing efficiency has also been improved significantly. Among the cases Llinks recently dealt with, those declared in summary procedure were all completed within 15 days after the filing, which may help the related transaction parties to complete the closing as soon as possible, and the law enforcement progress may be further promoted at the same time. In recent years, the anti-monopoly law enforcement in China is impressive, and the number of declarations of concentration of undertakings has increased year by year. In 2018, the number of declarations in China exceeded 400 for the first time, reaching 442 with an increase of 36% compared with 2017. A concise, accurate and efficient review process can help the declaring enterprises to be more lawful and compliant, and also help law enforcement agencies to further improve and intensify law enforcement;
2. The threshold of declaration has been strictly evaluated. Strict examinations and identifications will be applied to any case that may trigger the declaration and any declaring party involved. In particular, for transactions involving minority equity investments or acquisitions, parties to the transaction need to carefully analyze whether the threshold is met, and sufficient space shall be reserved in the transaction structure and transaction documents. In view of the revision of the anti-monopoly law in the future, the amount of penalty of the unreported cases must be increased greatly. It is recommended that all parties concerned (especially the party bearing the obligation to declare) shall treat the declaration with caution.
