China to review foreign M&A

%3CP%3E%3CFONT%20face%3DVerdana%3EA%20new%20regulation%20issued%20by%20China%27s%20Ministry%20of%20Commerce%20%28MOC%29%20on%20Friday%20states%20that%20the%20government%20will%20review%20mergers%20and%20acquisitions%20of%20domestic%20companies%20by%20foreign%20investors%20for%20national%20security%20purposes.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EIf%20any%20mergers%20and%20acquisitions%20involving%20foreign%20investors%20are%20determined%20to%20be%20a%20threat%20to%20national%20security%2C%20those%20deals%20should%20be%20terminated%2C%20according%20to%20the%20regulation.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EIn%20addition%2C%20any%20past%20mergers%20and%20acquisitions%20of%20domestic%20companies%20by%20foreign%20investors%20that%20are%20found%20to%20have%20threatened%20national%20security%20will%20be%20terminated.%20As%20an%20alternative%2C%20the%20MOC%20may%20%22take%20relevant%20measures%20such%20as%20equity%20and%20asset%20transfers%20or%20other%20methods%20to%20eliminate%20their%20%28mergers%20and%20acquisitions%29%20influence%20on%20national%20security%2C%22%20according%20to%20the%20regulation.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EThe%20regulation%20will%20take%20effect%20from%20Sept%201%20of%20this%20year%2C%20the%20ministry%20said.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EAccording%20to%20a%20circular%20concerning%20the%20review%20system%2C%20which%20was%20issued%20in%20February%20by%20the%20general%20office%20of%20the%20State%20Council%2C%20or%20China%27s%20cabinet%2C%20the%20review%20process%20will%20involve%20foreign%20mergers%20and%20acquisitions%20of%20domestic%20military-industrial%20enterprises%20and%20supporting%20firms%2C%20companies%20near%20%22major%20and%20sensitive%20military%20facilities%22%20and%20other%20mergers%20and%20acquisitions%20that%20are%20deemed%20to%20be%20relevant%20to%20national%20security.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EReviews%20will%20be%20also%20needed%20for%20foreign%20mergers%20and%20acquisitions%20of%20domestic%20enterprises%20operating%20in%20security-related%20sectors%20that%20may%20be%20controlled%20by%20foreign%20investors%20after%20being%20acquired%2C%20such%20as%20agriculture%2C%20energy%20and%20resources%2C%20infrastructure%20and%20transportation.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EGovernment%20departments%20under%20the%20State%20Council%2C%20national%20industry%20associations%2C%20competitors%2C%20suppliers%20and%20other%20related%20parties%20may%20apply%20for%20reviews%2C%20according%20to%20the%20regulation.%3C/FONT%3E%3C/P%3E%0D%0A%3CP%3E%3CFONT%20face%3DVerdana%3EThe%20State%20Council%20announced%20on%20Feb%2012%20that%20it%20would%20create%20a%20mechanism%20for%20overseeing%20foreign%20mergers%20and%20acquisitions%20of%20domestic%20firms.%20A%20ministerial%20joint%20committee%20will%20be%20established%20for%20this%20purpose%2C%20according%20to%20the%20commerce%20ministry.%3CBR%3E%3C/FONT%3E%3C/P%3E