Mergers and acquisitions in Europe by Chinas
state-owned enterprises (SOEs) are now being reviewed by the
European competition authorities as if all Chinese SOEs
controlled by the state are involved in the transaction.
In-depth assessment for competition issues by the
European Commission (EC) can result in significant costs,
months of delay, and distraction of senior management. This is
because the requirement to notify a transaction in Europe is
based on the worldwide and European turnover of all the
entities ultimately controlled by the Chinese state.
The accumulation of turnover of all SOEs doing
business in Europe, even for a relatively small transaction,
can mean the SOE concerned will have to obtain approval from
the EC. Failure to obtain prior approval can result in fines of
tens of millions of euros.
Four Chinese SOEs PetroChina, China National
Agrochemical Corp (CNAP), Sinochem and China National Chemical