Cause for Complications: State-owned Assets In M&A Deals

Transactions involving state-owned assets (SOAs) in China have long been subject to requirements not otherwise applicable in purely private deals. Indeed, as China presses forward with consolidations and privatizations of its state-owned enterprises (SOEs), this web of specialized requirements has expanded to address an increasingly broad range of transactions, from management buyouts of SOEs to (at least prospectively) the public trading of what are now state-owned non-tradable shares. But even plain vanilla transactions that involve, for example, the sale of state-owned equity interests in Sino-foreign joint ventures have in recent years become subject to a progressively more complex array of procedural requirements administered by separate and distinct governmental bodies.