Have no fear

December 01, 2006


China's new political M&A control should not discourage investors

The new Regulations on Foreign Investors Merging with or Acquiring Domestic Enterprises, which took effect in September, introduced a new national economic security (NES) test for cross-border M&A creating concern among foreign investors. But they needn't worry, at least in the near term.

The new NES test might impose additional self-discipline on foreign acquirers, as the acquisition of domestic market leaders with a commanding market share might not be politically feasible. But this might not have been achievable under the old regime anyway.

The new NES rules are therefore not a signal that China is shutting the door to cross-border M&A, but the more politicized a proposed transaction becomes, the more likely it is that the NES levers will be pulled to block or modify the deal. This risk has always existed, but the political levers are perhaps more evident and might become more robust under the new...




It's much more efficient in terms of regulatory capital. But it's mad how big they have become

A UK partner reacts to banks' use of derivatives to fund acquisitions

Web seminars

US and EU hybrid capital
February 3 2010
The future of hybrids, in a popular discussion between IFLR, Morrison & Foerster and Calyon

Latest Issue

March 2010

Basel III: The revenge of Basel
New Basel rules are affecting everyone differently. In the UK banks are worried about grandfathering, in Germany the headache is hybrids and in the US it's risk structures. Meanwhile Japan has some tips and Hong Kong structured its first hybrid [more]