Break it up: Mofcom's new rules on divestment

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clpstaff

The competition regulator has released new legislation clarifying the divestiture process that occurs as part of merger regime enforcement, however there are concerns relating to the publicity of timeframes and the amount of discretion the government has in setting the terms of a divestment

China's Ministry of Commerce (Mofcom) has published new rules governing the divestment of business operations or assets, where this occurs as a condition of Mofcom's approval of an M&A deal under the Anti-monopoly Law (AML) merger control regime.

    The Tentative Provisions for the Implementation of Asset or Business Divestitures of Concentrations of Business Operators (关于实施经营者集中资产或业务剥离的暂行规定) (Divestiture Rules) came into effect on July 5 2010. Although the Divestiture Rules are termed “provisional”, and thus may be updated over time, they have full legal effect in their current form.

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