Everyone in China has good reason to celebrate: the country's 60th national day, which is supposed to be even more spectacular than the Olympics opening ceremony. A decision made by MOFCOM this Wednesday has given King & Wood and Clifford Chance an extra reason.
MOFCOM has given conditional clearance to Pfizer's US$68bn acquisition of Wyeth (both are pharmaceuticals companies) on anti-monopoly grounds. A King & Wood team led by senior partner Susan Ning and a team of Clifford Chance lawyers headed by Beijing-based counsel Ninette Dodoo advised Pfizer on antitrust issues.
"The clearance is an important milestone for Pfizer's merger with Wyeth, and also tells us a lot about the continued development of China's competition procedures," said Ninette Dodoo, who relocated to Beijing from Brussels earlier this year to head up CC's antitrust practice in China. Now the transaction has received clearance from China, EU and Australia, Dodoo expected the deal to reach final closure very soon.
CC has been engaged by Pfizer to act as international counsel and coordinator on competition filings for the Wyeth merger in all territories apart from the US and Canada, where decisions are still awaited from the competition authorities. The firm has advised on the competition aspects of Pfizer's last three major transactions.
This is the second conditional clearance on which Clifford Chance has advised since the Anti-Monopoly Law was introduced in August 2008. The first one it advised on was the InBev/ Anheuser-Busch transaction. So far, the firm has advised clients on more than 20 applications, most of which have been cleared by the Chinese regulators without conditions.
Reviewing the regime's development over the past year, Dodoo said that China is moving in the right direction and is quickly establishing itself as an important antitrust regime.
"MOFCOM has just begun reviewing merger control applications in a modern sense, so it's still a very new regime. But MOFCOM should be congratulated that they've had to deal with a number of high-profile global transactions, and they've shown themselves to respect international norms and rules," Dodoo said.
"China is moving in the right direction. Although there is still a lot to learn, the regulators have the necessary will and resources to be able to move ahead in their desire to become one of the more important jurisdictions when it comes to merger control," she added.
Yesterday, MOFCOM also approved General Motors' re-acquisition of assets of Delphi, a bankrupt car-parts manufacturer, under certain conditions.
Freshfields' competition partner Michael Han in Beijing said these two decisions to impose conditions on this foreign-to-foreign deal demonstrates MOFCOM's willingness to intervene in cases that give rise to local concerns in China; and that companies engaging in international M&As should not underestimate the China merger control process particularly where there are local interests involved.
"These decisions clearly demonstrate MOFCOM's appetite for intervention in cases that raise 'local issues' in China, be it from an antitrust angle or industrial policy perspective. Chinese competitors and customers are increasingly vociferous in signaling their concerns, knowing that MOFCOM will attach considerable weight to their views in its review. Merger clearances are no longer a straightforward process in China and companies engaging in international M&As will need to be sensitive to local concerns in the China merger review process," said Han.
Related stories: