Adoption of a simplified merger review procedure

The Ministry of Commerce (MOFCOM) released new Guiding Opinions concerning the “Simplified Merger Review Procedure”, aiming at accelerating the review process. Although the provisions are still not very clear on the procedural issues, they set out the trend for this sector.

The Guiding Opinions clarify issues such as the requirements for submission of documents, consequence of the identification of "simple case" status, the timeline for deciding on "simple case" status…

The first advantage is that the load of paperwork for filing an application is significantly reduced, the notification form being substantially simplified.

The second set of direct consequences is the “simple case” status itself. The parties to the concentration have two options : they can directly submit a simplified form notification, or they can apply for pre-notification consultation with MOFCOM. In both cases, the MOFCOM clearance is required for the granting of this status. If MOFCOM accepts, then it will publicize the case application on its website for 10 days. Any third party is allowed to raise objections within theses 10 days to the "simple case" status.

The “simple status” can turn into something not so simple if this status is refused to the applicant. The problem is that the merging parties are obliged to re-file the notification under the normal notification system if the simple case notification is denied. In other words, if a simple case application is not accepted or the status is subsequently revoked, the entire merger process could take longer than a standard process. So, unless it is 100% sure that the application will be accepted, it might be better to seriously consider going through the normal procedure. The “simple status” : not so simple…