The China Securities Regulatory Commission (CSRC) last week finalised the regulations governing mergers and acquisitions of domestic-listed companies
The move has been welcomed by corporate lawyers in the region as they think this will increase the flow of M&A deals in China. Nicholas Howson, a partner at US firm Paul Weiss Rifkind Wharton & Garrison's Beijing office, said: "The new regulations are welcomed by Chinese and international lawyers practising in China. They will result in more public M&A activity. With these provisions, acquirers and insiders - including directors and management - are able to understand procedures, duties and mechanics of proposed takeovers concerning companies that have a portion of their share capital listed. This should translate into increased involvement by legal professionals and opportunities to advise on how players should proceed and conform to their newly-described duties under the law." The new regulations, which Freshfields and other overseas law firms helped to draft, will come into effect on 1 December. They aim to ease restrictions on private investors buying into listed companies, allowing cash-rich and private investors to take over listed companies that are predominantly state-owned. Howson said: "The new regulations elaborate key aspects of China's securities law, such as the 30 per cent mandatory offer provisions. For example, the new regulations provide guidance on disclosure, take-over/acquisition procedures, fairness opinions, and valuation requirements among others. All of which are key aspects of developing the public M&A regime."