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Regulatory Research and Intelligence, to support a global M&A deal

During the recent years, filings for anti-trust review at PRC's Ministry of Commerce ("MOFCOM") from international merger and acquisition deals experienced significant increase. In 2017, a China-based investment equity group announced plans of acquiring an international service group with extensive asset and operations in mainland China. Being a record-breaking deal in terms of transaction volume taking place in a booming sector, the transaction naturally attracted investors’ attention, and concerns over potential regulatory hurdles soon followed.

Grapevine was commissioned by a client to monitor MOFCOM’s anti-trust review and approval process of the deal, with the primary aim of identifying potential risks that might hinder a swift MOFCOM clearance, as well as observing the approval process timeframe and significant dates.

Based on our understanding of the latest MOFCOM anti-trust review practices and tendencies, as well as indications observed from MOFCOM’s official information release, Grapevine interviewed a wide range of sources including personnel immediately involved in the transaction, anti-trust analysts and lawyers focusing on the logistic sector, as well as insiders close to MOFCOM’s anti-trust review, with the objectives of collecting firsthand remarks or intelligence on the review process.

Furthermore, to address the potential scenario of complaints at MOFCOM coming from competitors, inquiries were conducted with employees of the acquired group’s Chinese business operations as well as industry peers to assess market sentiments or rumors over criticism.

Amongst the uncertainties that precede the deal’s final closure, getting better informed about the regulatory review process and staying updated with the latest development continue to serve as essential reference in investment decision-making.

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