China's Ministry of Commerce introduced a simplified merger-review program earlier this month.
Under the rules, transactions meeting certain thresholds will qualify for a “fast track” review process that requires less time to complete.
The threshold for the fast-track is 15 percent of market share for mergers of companies in the same industry (horizontal relationships) and 25 percent for vertical mergers (when a firm acquires different parts of the supply chain).
Moreover proposed mergers that account for less than 25 percent of market share and foreign transactions with no domestic effect in China will also benefit from the fast-track program.
The current Chinese merger-approval system can take up to 180 days due to agency resource constraints and the need to consult with other industry-specific trade associations and government agencies. MOFCOM aims to ultimately have as much as 60 percent of transactions qualify for the fast-track option and receive clearance within 30 days.
The improved review program is just one part of MOFCOM's efforts to reduce delays in its merger-review process. In September, MOFCOM made personnel changes in four of the seven divisions within its Antimonopoly Bureau.
Practitioners have reported that the staff changes at the Bureau have already had a positive impact on review times, according to a client alert from Cadwalader, Wickersham & Taft.
Also, in November 2013, the Bureau announced its intention to construct a database to collate data on certain sectors in China. The database is intended, in part, to aid the merger-review capabilities, and reduce delays caused by the Bureau's need to consult other industry-specific agencies before clearing deals.