Chinese merger filing in the wake of Qualcomm/NXP and Essilor/Luxottica
On 26 July 2018, Qualcomm announced to abort the USD 44 billion takeover of Dutch chip maker NXP as it failed to obtain antitrust approval from China’s State Administration for Market Regulation (“SAMR”). Around the same time, SAMR announced its conditional approval on the merger between Essilor and Luxottica, being the only competition authority around the globe to have imposed remedies on this case. The two cases stirred wide-spread speculation that the Chinese merger control regime has been politicized and worries among companies that their contemplated deals would be affected.
This note discusses whether Qualcomm/NXP and Essilor/Luxottica reflect a change in enforcement climate against the background of ongoing geo-political and trade disputes. As detailed below, our observations are that overall the Chinese merger control review remains “business as usual”, in particular for straightforward cases without competition or policy concerns; it is advisable to plan for the unique features of the Chinese review (e.g. recognition of the conglomerate effect theory of harm); to what extent a specific case would be influenced by noncompetition factors would require a case-by-case analysis but the majority of the filings should remain unaffected.
Read more on the Chinese merger control in the full report.