China’s Ministry of Commerce (Mofcom) released draft merger guidelines proposing more information on the timetable for companies to provide commitments to Mofcom when seeking merger approval, as well as guidance on both structural and behavioural remedies.
Under the new regulations, Mofcom will have to make merging parties aware of any competition issues “in good time” and then set a deadline for proposing remedies. Failure to provide commitments would lead to Mofcom blocking the deal. Any final remedies or modifications to proposed conditions must be submitted no later than 20 days before the merger review period ends.
Mofcom has also proposed that conditions may be modified or removed if the competitive landscape changes significantly enough. Finally, failure to comply with commitments could lead to Mofcom unwinding a merger and imposing a 500,000 renminbi (AUD$77,144) fine. The parties would then have to reapply for approval of the deal.