China M&A Rulings Create Hot Competition for Antitrust Lawyers

Posted by Eric Haun
Wednesday, July 02, 2014

China's increasing regulatory influence over international mergers and acquisitions has helped to create the hottest new commodity in its legal industry: anti-trust lawyers.

Six years ago, China did not even have a legal system for regulating the impact of M&A on competition. Today, its Ministry of Commerce is the biggest wildcard for dealmakers trying to get a major cross-border deal past anti-trust regulators.

The ministry's decision last month to reject Danish shipping group A.P. Moller-Maersk's planned alliance with Swiss and French rivals came as a "big surprise" to Maersk Chief Executive Nils Smedegaard Anderson, whose team had been in close contact with the regulator until days earlier.

That rejection, on grounds that it was not in the interest of Chinese consumers, was the first time the regulator had blocked a tie-up that involved no company from China.

With global M&A volumes reaching $1.75 trillion in the six months to June, 75 percent higher than a year ago according to Thomson Reuters data, lawyers who can help companies steer a deal past China's anti-trust regime have become hot property.

International law firms such as Linklaters and Mayer Brown JSM have recently bolstered their teams, while Norton Rose Fulbright and King & Wood Mallesons say they are looking to expand their China competition practices.

"From last year, I really feel like spring has come," said Zhaofeng Zhou, counsel at Taylor Wessing in Beijing. "At the beginning, headhunters wouldn't call you because there were too few jobs, but now they call you all the time."

While recruitment of competition lawyers has been growing since China introduced anti-trust law in 2008, headhunters say there has been a sharp uptick in the past year, even for foreign law firms that are shrinking in other practice areas.

Janet Chan, manager of the legal division at recruiter Michael Page, said she had seen a 20 percent increase in demand for anti-trust attorneys over the past 12 to 18 months.

The Maersk decision is set to raise that demand further since the alliance had been approved by U.S. and European regulators. China's contrary ruling made "people pay attention", said John Hickin, anti-trust partner at Mayer Brown JSM in Hong Kong.

A string of large cross-border deals are expected to need approval from the Ministry of Commerce, known as MOFCOM, which is typically required when the combined companies' annual sales in China exceed 400 million yuan ($64.4 million).

These include U.S. conglomerate General Electric's $16.9 billion bid for the energy business of French engineer Alstom, a deal that has already been revised to deal with the French government's concerns over jobs.

U.S. medical device maker Medtronic Inc's $43 billion purchase of Dublin-based rival Covidien Plc will need MOFCOM approval at a time when Beijing is focused on trying to bring down costs in its domestic healthcare sector.

"The law firms are making a killing on a new practice of advising people on how to get through the Chinese regulator," a Hong Kong-based M&A banker said. He declined to be identified because he was not authorized to speak to the media.

"The issue is not that they (MOFCOM) are flexing their muscles, the issue is no one understands how they come up with what they come up with," he added.

Aggressive Approach
Linklaters in Hong Kong hired Clara Ingen-Housz from U.S. firm Baker and McKenzie last year to bolster its practice. Mayer Brown JSM has hired a new competition associate who will be joining the Hong Kong practice in September.

Other firms looking to expand have their work cut out though.

"The talent pool for competition specialists in this region is not a deep one," said Mark Jephcott, head of competition for Asia at Herbert Smith Freehills in Hong Kong.

Aside from M&A, joint ventures in China may also need MOFCOM approval. They have also soared with the estimated value of alliances formed in China up 277 percent in 2013 from 2012, according to Thomson Reuters data.

Multinational companies are also turning to anti-trust lawyers for advice on other areas of competition law in China such as price-fixing, due to closer regulatory scrutiny.

"MOFCOM and anti-monopoly bureaus have been incredibly active and incredibly aggressive in pursuing both competition law and industrial policy aims," said Martyn Huckerby, a competition partner at King & Wood Mallesons, which has caught the attention of a lot of international companies.

He said companies were seeking out advisers earlier in the process to gauge the impact of regulations on their deals.

Rising demand for competition attorneys is also spreading beyond China to the rest of Asia, as other emerging economies adopt antitrust regimes.

Hong Kong adopted anti-trust law in 2012, though it is yet to take effect, while Vietnam, Thailand and Singapore have also stepped up anti-trust enforcement.

"It wouldn't surprise me if the demand for competition law was now going to start doubling or trebling every year or two," said Huckerby.

($1 = 6.2101 Chinese Yuan Renminbi)

(Reporting by Shanghai Newsroom and Denny Thomas; Editing by Rachel Armstrong and Alex Richardson)

Maritime Reporter June 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Legal

Thai Resort Owners Sue State Owned Company for Oil Spill

Business owners on Koh Samet island are suing a state-owned petroleum enterprise for the oil spill that polluted the resort island's beaches last year. More than 50,

Nigerian Piracy Threatens UK Interests: New Report

The UK economy is heavily exposed to lawlessness off the coast of Nigeria, a new report published today by the UK Chamber of Shipping says. The report found that almost all of the UK’s annual £6.

Maine Port City Bans Oil Loading

City councilors in South Portland, Maine, voted late Monday night to ban the loading of crude oil onto tankers along its waterfront, throwing up yet another roadblock

News

SHIPPINGInsight 2014 Agenda Announced

Annual Conference, Exhibition and Networking Event Brings Together Shipowners and Technology Companies to Address Practical Solutions for Efficient Operations The

Kito Americas Acquires Peerless Industrial

Kito Americas, Inc. announced today that the company has entered into a stock purchase agreement to acquire Peerless Industrial Group from Westview Capital Partners II, L.

Trading Dutch Well Placed to Pursue Russia Sanctions

The seafaring Netherlands prides itself on being a trading nation, reluctant to let politics get in the way of a good deal. But since the downing, allegedly

Logistics

Heavy Lift & Project Vessels Face Berthing Delays at Indian Ports

Heavy Lift & Project vessels calling at Indian ports are experiencing congestion, which according to the trade is an artifically created situation. They point out that unlike other vessels,

Suicide Attack Escalates Libya Violence, Oil Output Slips

Crude output slips for first time since port deal; fresh clashes in Tripoli and Benghazi. Brega oil port seen open in few days. A twin suicide bombing at a Libyan

New ICTF Boosts Crowley’s Efficiency

The opening of Florida East Coast Railway’s (FEC) new, state-of-the-art intermodal container transfer facility (ICTF) adjacent to Crowley Maritime Corporation’s Port Everglades, Fla.

Mergers & Acquisitions

Kito Americas Acquires Peerless Industrial

Kito Americas, Inc. announced today that the company has entered into a stock purchase agreement to acquire Peerless Industrial Group from Westview Capital Partners II, L.

Navios Announces VLCC Delivery

Navios Maritime Acquisition Corporation, an owner and operator of tanker vessels, has announced that the Nave Electron, a 2002-built VLCC of 305,178 dwt, was delivered

Sembawang Shipyard to Convert 2 FPSOs for Kaombo Project, Angola

Sembcorp Marine’s wholly-owned subsidiary Sembawang Shipyard has secured a Floating Storage Production Offloading (FPSO) conversion contract worth about S$600 million from Saipem SA,

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Naval Architecture Navigation Pipelines Pod Propulsion Salvage Ship Repair Ship Simulators
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0900 sec (11 req/sec)