After months of uncertainty, companies planning M&A deals in China have been rewarded. Mofcom has published further draft rules to clarify its anti-monopoly law – including guidance on calculating turnover and control.
Last month, four documents appeared on the regulator's website. While two concern merger investigations and two explain the notification process, one of these, Interim Measures for Notification of Concentration of Undertakings, also discusses turnover calculations and control thresholds.
Control and turnover
Article 2 of the Interim Measures clarifies Article 20 of the Law.
According to an unofficial translation of Article 2 obtained by IFLR, control entails "acquiring more than 50% of the voting shares or the assets of another undertaking" or "obtaining the ability to decide nomination of directors... the ability to decide the financial budget... and the ability make other significant decisions on significant management and operation matters."
Lawyers have welcomed these details but there are...