What is the legal framework for mergers and acquisitions of businesses in China?

The legal framework for mergers and acquisitions (M&As) of businesses in China is mainly governed by the Company Law of People’s Republic of China (PRC) and the Regulations on Mergers and Acquisitions of Companies (Regulations). In China, the implementation of M&As is subject to the approval and filing requirements under the Company Law and the Regulations. The Company Law provides the general framework and states that all mergers and acquisitions must comply with the relevant laws and administrative regulations and must not infringe the legitimate rights and interests of the companies, shareholders, creditors and other related parties. The Regulations further specify that an M&A involving any party from mainland China must be filed with the Administration for Industry and Commerce (AIC) in the region of the target company after completion of the M&A. The Regulations also state that M&A transactions involving any mainland Chinese party must be published in at least two national industry magazines at least 30 days before the completion of the transaction. In addition, the National Development and Reform Commission has also issued the Regulations on the Control of Concentration of Business Operators to regulate concentrations of business operators, which includes acquisitions of equity stakes or assets through M&A. The NDRC review is required for any merger or acquisition involving any Chinese business operator which fails to meet the review thresholds. In conclusion, the legal framework for M&As of businesses in China is highly regulated and requires compliance with the Company Law and Regulations as well as other provisions.

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What is the legal framework for mergers and acquisitions of businesses in China?

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