Article 20 In case of any of the described in Article 19 in connection with a merger or acquisition of a domestic enterprise by foreign investors, and if MOFTEC and SAIC believe that the merger or acquisition might lead to over-concentration, impair fair competition or damage consumers' interests, MOFTEC and SAIC shall, within 90 days upon its receipt of all the documents required to be submitted, jointly or separately after consultation with each other, hold a hearing of the relevant departments, organizations, enterprises and other related parties and decide according to law whether to approve the application for the merger or acquisition.
Article 21 In case of any of the following occurrences in connection with an offshore merger or acquisition, any party to the merger and acquisition shall, prior to its public announcement of the plan for the merger or acquisition or together with its application to the regulatory authorities of the country where it is located, submit to MOFTEC and SAIC the plan for the merger or acquisition. MOFTEC and SAIC shall examine whether the merger or acquisition might cause over-concentration of the domestic market, impair fair competition in the domestic market or damage the domestic consumers' interests, and decide whether to approve the plan:
(I) the assets owned by a party to the offshore merger and acquisition within China exceeds RMB 3 billion;
(2) the sales of a party to the offshore merger or acquisition in the domestic market for the current year have exceeded RMB 1.5 billion;
(3) the aggregate market share in the domestic market by a party to the offshore merger or acquisition and its affiliated enterprises has reached 20%;
(4) the aggregate market share in the domestic market by a party to the offshore merger or acquisition and all of its affiliated enterprises in the domestic market will reach 25% as a result of the offshore merger or acquisition; or
(5) as a result of the offshore merger or acquisition, a party to the offshore merger or acquisition will hold, directly or indirectly, equity of more than 15 foreign investment enterprises engaging in the related businesses within China .
Article 22 In case of any of the following occurrences in connection with a merger or acquisition, a party to the merger or acquisition may apply to MOFTEC and SAIC for an exemption from examination:
(1) the merger or acquisition may improve the conditions for fair competition in the domestic market;
(2) the merger or acquisition will restructure the enterprise running at a loss and ensure employment;
(3) the merger or acquisition will absorb advanced technologies and management professionals and enhance the international competitiveness of the domestic enterprise: or
(4) the merger or acquisition will improve the environment.
Article 23 All documents submitted by investors shall be grouped into categories as required by the regulations and accompanied by a table of contents of the documents. All documents required to be submitted shall be in Chinese.
Article 24 The Provisions shall apply to all mergers and acquisitions of domestic enterprises by investment companies duly established by foreign investors within China .
Any acquisition of equity interest of PRC foreign investment enterprise by foreign investors shall be governed by the currently laws and administrative regulations governing foreign investment enterprises and Certain Regulations on Change in Shareholders' Equity Interest of Foreign Investment Enterprises. Matters not covered therein shall be governed by the Provisions. Article 25 Any merger or acquisition by investors in Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan of a domestic enterprise established in any other regions of the PRC shall be handled with reference to the Provisions.
Article 26 The Provisions shall come into force on April 12, 2003.Promulgated by Tlze Ministry oj Foreign Trade and Economic Cooperation, tlze
State Administration of Taxation, tlze State Administration for Industvy and Commerce,the State Adrninistration @Foreign Exchange on March 7, 2003
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