Almost ten months after its last published decision, the Ministry of Commerce (MOFCOM) has recently issued its sixth conditional clearance decision since the enactment of the Anti-Monopoly Law (AML) in 2008. On 13 August 2010, MOFCOM approved the proposed US$28bn acquisition of Alcon by pharmaceutical giant Novartis, subject to conditions. It is the first time that MOFCOM has imposed conditions to address 'coordinated effects' arising from a merger transaction.
 

MOFCOM's busy two years

According to a source close to MOFCOM, about 150 notifications have been accepted by the regulator since the Anti-Monopoly Law became effective. 120 of the cases have been dealt with, and only one was blocked while six were granted approval subject to conditions.

A team from King & Wood, led by the firm's head of antitrust & competition practice Susan Ning, acted as the sole PRC counsel in respect of the antitrust aspects (including the merger filing with MOFCOM) of this global transaction. King & Wood worked alongside Novartis' international counsel Allen & Overy. So far, the parties have filed merger review applications in 19 jurisdictions, and the acquisition has been cleared by antitrust authorities in most of these jurisdictions.
 
Prior to Novartis/Alcon, Ning and her team also played a key role in obtaining MOFCOM's conditional clearance for Pfizer's US$68bn acquisition of Wyeth Pharmaceuticals in 2009 and MOFCOM's unconditional clearance for Mitsubishi Chemistry's US$2.1bn acquisition of Mitsubishi Rayon in 2010. According to an anonymous source, King & Wood has completed more than 30 merger filings with MOFCOM over the past two years. 

During the past two years of her practice, Ning has noticed an increased level of clarity and predictability of MOFCOM's merger control procedures. "The merger filing regime has improved and will continue to improve. We expect more foreign companies to file a merger notification with MOFCOM for their transactions in and outside China. The number of filings for mergers between domestic companies will grow too, but in a more gradual way," said Ning. 
 
Ning stresses the importance of lawyers and their clients having "sophisticated and informed" discussions with MOFCOM to understand the way the regulator is working and the issues that it is concerned with. 

Currently, the firm has an 11-strong team focusing exclusively on merger control filings and antitrust compliance. Liu Cheng, formerly a lead lawyer at DLA Piper's international trade and competition practice in Beijing, is the latest addition to the team. ALB