SAMR’s New Merger Filing Guidelines Review: What It Means for Competition Law in China

Introduction: A New Era for Merger Control in China

In June 2023, the State Administration for Market Regulation (SAMR) released a comprehensive overhaul of China’s merger filing guidelines, marking the first major revision of the merger control regime since the original AML took effect in 2008. The new guidelines, officially titled the “Provisions on the Review of Concentrations of Business Operators” (the Merger Provisions), represent a significant modernization of China’s merger control framework, aligning it more closely with international best practices while introducing reforms tailored to China’s unique regulatory environment.

The Merger Provisions were issued as part of the implementation framework for the 2022 AML amendments and replace the original 2009 merger review rules. The new rules are supplemented by several additional guidance documents, including the “Guidelines for Filing Concentrations of Business Operators” (June 2023) and the “Guidelines for Simple Case Filing Standards” (September 2023). Together, these documents constitute the most significant reform of China’s merger control system in over a decade and have important implications for foreign companies undertaking M&A transactions with China nexus.

Reformed Filing Thresholds and Jurisdictional Scope

The Merger Provisions introduced important changes to the turnover thresholds that trigger mandatory merger filing obligations in China, along with clarifications of SAMR’s jurisdictional scope.

Revised turnover thresholds. The Merger Provisions maintained the basic structure of the filing thresholds — combined global revenue of RMB 10 billion and at least two parties each with China revenue of RMB 400 million — but introduced a new supplemental threshold for transactions that may have competitive significance even if the standard thresholds are not met. Under the new supplemental threshold, a concentration filing is required if: (a) the combined global revenue of all parties exceeds RMB 10 billion; (b) at least two parties each have China revenue exceeding RMB 400 million; and (c) SAMR determines that the concentration may have the effect of eliminating or restricting competition. This supplemental threshold gives SAMR discretion to require filings for transactions that fall outside the standard thresholds but raise competition concerns, such as transactions involving nascent competitors or innovative technology companies with low current revenues.

Expanded jurisdictional scope for foreign-to-foreign transactions. The Merger Provisions clarified SAMR’s jurisdiction over foreign-to-foreign transactions that have effects within China. The provisions expressly state that a concentration between foreign companies is subject to SAMR review if the transaction has the effect of eliminating or restricting competition in the Chinese market. This extraterritorial application of China’s merger control regime follows the approach of the EU Merger Regulation and the US Hart-Scott-Rodino Act and underscores the importance of merger filing compliance for global transactions with China market effects.

Clarification of “control” and “decisive influence.” The Merger Provisions provided important clarifications on the concepts of “control” and “decisive influence” — the triggers for determining whether a transaction constitutes a notifiable concentration. The provisions introduce a non-exhaustive list of factors for assessing control, including: shareholding percentage; voting rights and veto rights over strategic decisions (budget, business plan, appointment of senior management); rights to appoint directors or senior management; contractual arrangements conferring control; and the practical ability to exercise decisive influence over business operations.

The Expanded Simple Case Procedure

One of the most practical innovations of the Merger Provisions is the expansion and formalization of the simple case procedure, which allows for expedited review of concentrations that clearly do not raise competition concerns.

Broadened eligibility criteria. The Merger Provisions expanded the categories of concentrations eligible for the simple case procedure. In addition to the traditional categories (joint ventures with no China market overlap or vertical relationships; acquisitions where the acquirer’s market share is below 25% in each relevant market; joint ventures where the JV’s market share is below 25%), the new provisions add eligibility for: concentrations where the parties’ combined market share is below 15% in horizontally affected markets; concentrations where each party’s market share is below 25% in vertically affected markets; and concentrations in new and emerging industries that do not raise competition concerns as determined by SAMR.

Expedited review timeline. Simple cases are eligible for a 30-day review timeline (compared to the standard Phase I timeline of 30 days plus Phase II of 90 days). The efficiency gains are significant: simple cases that were previously taking 3-6 months for clearance can now be resolved in as little as 3-4 weeks from the date of submission.

Publication and third-party comments. The Merger Provisions require SAMR to publish simple case filing information on its website for a 10-day public comment period. This transparency mechanism allows third parties to flag potential competition concerns that SAMR may have overlooked and provides a check against inappropriate use of the simple case procedure. If significant concerns are raised during the comment period, SAMR may remove the case from the simple procedure and conduct a standard review.

Implications for foreign acquirers. For foreign companies acquiring targets in China, the expanded simple case procedure can significantly reduce regulatory timeline uncertainty. Transactions that clearly meet the simple case criteria can be cleared in approximately 4-6 weeks including filing preparation time, compared to 4-8 months for standard reviews. Filing parties should carefully assess simple case eligibility at the deal structuring stage to take advantage of the expedited pathway.

Streamlined Filing Documentation Requirements

The Merger Provisions introduced significant simplifications to the documentation requirements for merger filings, reducing the administrative burden on filing parties.

Reduced filing form content. The new filing form requires less detailed information in several areas, including: simplified competitive landscape analysis that focuses on the most important competitors rather than exhaustive lists; reduced financial data requirements that focus on the most relevant revenue and profit figures; and streamlined organizational structure disclosures that focus on the entities directly involved in the transaction.

Acceptance of English-language documents. In a practical improvement, the Merger Provisions confirm that SAMR will accept English-language versions of documents that are originally in English (such as global organizational charts, financial statements prepared under international accounting standards, and transaction documents governed by foreign law). Chinese translations are still required for the filing form itself and for any analyses submitted to SAMR, but the burden of translating voluminous global documents has been reduced.

Electronic filing platform. SAMR has implemented an electronic filing platform that allows for submission of merger notifications and supporting documents in digital format. The platform includes functionality for secure communication with SAMR case handlers, submission of supplemental information, and tracking of case status. The electronic platform has reduced filing processing times and improved transparency for filing parties.

Pre-filing consultation. The Merger Provisions formalize the pre-filing consultation process, allowing parties to discuss their transaction with SAMR before formal submission. Pre-filing consultations are particularly valuable for: complex transactions where the legal analysis is uncertain; transactions in novel or rapidly evolving markets where market definition is challenging; and transactions where the parties are considering offering remedies to address potential competition concerns. SAMR has committed to providing substantive feedback during pre-filing consultations, including preliminary views on market definition, competitive effects, and potential remedy requirements.

Enhanced Remedy Framework

The Merger Provisions introduced a more structured framework for the design and implementation of remedies in merger cases, reflecting SAMR’s growing experience with conditional clearances.

Types of remedies. The Merger Provisions formally recognize two categories of remedies: structural remedies (divestiture of assets, businesses, or equity interests) and behavioral remedies (commitments regarding supply, pricing, non-discrimination, or other ongoing conduct). The provisions establish a preference for structural remedies in cases where competition concerns arise from horizontal overlaps, while recognizing the appropriateness of behavioral remedies in cases involving vertical or conglomerate concerns.

Divestiture trustee mechanisms. The Merger Provisions introduce formal requirements for divestiture trustees in cases where structural remedies are imposed. The trustee is responsible for overseeing the divestiture process, including: identifying potential purchasers; evaluating purchaser suitability (including independence from the divesting party, financial capacity, and operational capability); and managing the divestiture timeline. The provisions require that trustees be independent of the filing parties and approved by SAMR.

Upfront buyer requirement. In cases where SAMR determines that the success of divestiture is critical to addressing competition concerns, the provisions allow SAMR to require an upfront buyer — a requirement that the filing party must identify and sign a binding agreement with a SAMR-approved buyer for the divestiture assets before the transaction can be cleared. This requirement reduces execution risk for structural remedies.

Monitoring and enforcement. The Merger Provisions establish ongoing monitoring mechanisms for behavioral remedies, including: periodic reporting requirements (quarterly or annual); independent monitoring trustees to verify compliance; and SAMR’s authority to modify remedies if circumstances change significantly.

Practical Implications for Foreign Companies

The new Merger Provisions have several practical implications for foreign companies engaged in M&A activity in China.

Earlier engagement with filing analysis. Foreign companies should begin assessing China merger filing obligations at the earliest stage of transaction planning. The jurisdictional clarifications in the Merger Provisions make it easier to determine whether a filing is required, but also create new obligations (such as the supplemental threshold) that may apply in cases where the standard thresholds are not met.

Simple case eligibility as a deal-enabler. The expanded simple case procedure can significantly improve transaction certainty for low-risk transactions. Foreign acquirers should assess simple case eligibility before finalizing transaction documentation and, where possible, structure transactions to qualify for the simple procedure.

Digital filing readiness. Foreign companies should familiarize themselves with SAMR’s electronic filing platform and prepare internal processes for digital filing submissions. The platform’s requirement for secure digital communication with SAMR means that filing parties must have responsive internal teams available during the review process.

Remedy planning for complex transactions. For transactions that may raise material competition concerns, foreign acquirers should engage in remedy planning early. The structured remedy framework provides greater predictability for remedy design and implementation, but requires more rigorous preparation and documentation than under the previous regime.

Conclusion

SAMR’s new Merger Provisions represent a significant step forward in the modernization of China’s merger control regime. The reforms streamline the filing process, enhance predictability for transaction planning, and provide a more structured framework for remedial action where competition concerns arise. For foreign companies, the new Provisions offer both improvements in process efficiency and new compliance obligations that require careful attention.

The most important practical benefits are the expanded simple case procedure, which can significantly reduce regulatory timeline uncertainty for low-risk transactions, and the formalized pre-filing consultation process, which allows parties to obtain early guidance from SAMR on complex issues. Foreign companies should take full advantage of these mechanisms to optimize their China merger control strategy.

As SAMR continues to develop its enforcement practice under the new Provisions, foreign companies should monitor future implementing guidelines, enforcement decisions, and court interpretations that will further refine the application of China’s merger control regime. The new Provisions signal that China is committed to maintaining a merger control regime that is both rigorous in protecting competition and efficient in facilitating pro-competitive transactions.