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 February 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Legal

USCG Free Boat from Ice Near Woods Hole

A Coast Guard crew responded to a fishing vessel trapped in ice in Woods Hole Passage, Woods Hole, Massachusetts, Saturday. At about 3 p.m., the crew of the fishing boat Capt.

Tug Boat Owner Jailed After Crew Man Dies

A tug boat owner was today was given an 8 month custodial sentence after his crew member died trying to reattach a tow line in a violent storm. During today’s hearing at Southampton Crown Court,

ClassNK's Structural Rules for Bulkers & Tankers

The Nippon Kaiji Kyokai (ClassNK) has announced the establishment of its “Common Structural Rules for Bulk Carriers and Oil Tanker” (Rules for the Survey and

News

USCG Free Boat from Ice Near Woods Hole

A Coast Guard crew responded to a fishing vessel trapped in ice in Woods Hole Passage, Woods Hole, Massachusetts, Saturday. At about 3 p.m., the crew of the fishing boat Capt.

Tug Boat Owner Jailed After Crew Man Dies

A tug boat owner was today was given an 8 month custodial sentence after his crew member died trying to reattach a tow line in a violent storm. During today’s hearing at Southampton Crown Court,

COMPIT to Showcase Smarter Ships, Systems & Solutions

The 14th International Conference on Computer and IT Applications in the Maritime Industries (COMPIT) will take place from 11th to 13th May 2015 in Ulrichshusen, Germany.

Logistics

Indian Ports to Set Sail on Corporatization

Indian Finance Minister Arun Jaitley said in Union Budget 2015 that government-run ports in India will be encouraged to corporatize and become companies under the Companies Act.

ADB Okays $30mln for Pak LNG Terminal

The Asian Development Bank (ADB) has approved a $30 million project loan to Engro Elengy Terminal Private Limited, a special purpose company which will build Pakistan’s

Crimea Nationalizes Cargo Port in Kerch

The Crimean State Council nationalized the Kerch-based cargo port Kamysh-Burun belonging to the Ukrainian financial-industrial group Altcom.   According to Crimean Parliament,

Mergers & Acquisitions

VLCCF - 4Q & FY 2014 Results

Knightsbridge Shipping Limited ( VLCCF ) reports net income of $5.2 million and earnings per share of $0.06 for the fourth quarter compared with a net loss of $6.

NMM lines up Box Buy

Navios Maritime Partners L.P. (NMM) an international owner and operator of container and drybulk vessels, announced today that it has secured, for no consideration,

SpeedCast Acquires Geolink Satellite Services

SpeedCast International Limited announced the acquisition of Geolink Satellite Services, part of the CETel Group. The closing of the transaction is subject to regulatory approval.

 
 
Maritime Security Maritime Standards Naval Architecture Pod Propulsion Port Authority Ship Electronics Ship Repair Ship Simulators Shipbuilding / Vessel Construction Winch
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: 0.2034 sec (5 req/sec)