The New M&A Law: Issues in Scope and Applicability

The newly effective Acquisition of Domestic Enterprises by Foreign Investors Tentative Provisions  (外国投资者并购境内企业暂行规定) (the Provisions, see China Law and Practice, 17(3), April 2003, pp. 27-39 for a full translation) have attracted considerable attention as a milestone in legislation regarding foreign direct investment (FDI) in China. Since promulgation of the Provisions, we've seen ongoing debates regarding their impact on FDI and the implications for China's regulation of acquisitions of foreign-invested companies' shares and assets. Naturally, the recurring questions focus on the Provisions' scope of coverage and their benchmark antitrust clauses.

The Scope of an Acquisition: Equity vs. Assets