On Anti-monopoly And The Regulations In Cross-border Mergers & Acquisitions

Since 1990s, cross-border Mergers & Acquisitions (hereinafter cross-border M&A)have substituted for green field investment and caused a hot discussion in the field ofinternational investment. As a choice of big enterprises for overseas investment, themerger company, target company and the country where the target company is locatedhave different opinions on cross-border M&A. The purpose of merger company is topursue maximum of profit, enlarge the scale of company in a short period, enter themarket of target company, increase market share and enhance its internationalcompetitive power by cross-border M&A. Today, with flying development of science andtechnology, and new looks of economic conditions day by day, speed is life. Cross-borderM&A has incomparable advantages on this. As to target company and the country it islocated, especially developing countries, their purpose is to introduce transnationalcorporation's capital, advanced technology and managing experience to strengthen theirown enterprises, upgrade domestic industrial structure and accelerate industrialization toimprove resources distribution and develop domestic economy. The great differences in 1purposes drive merger company and target company taking different actions in theprocess of cross-border M&A. Generally speaking, there are three choices for transnational corporations to realizetheir purposes: horizontal cross-border M&A, vertical cross-border M&A andconglomerate cross-border M&A with different effects to the country where targetcompany is located except each of them may cause monopoly which is the most seriousnegative effect. That is why the governments take measures to regulate cross-borderM&A. Horizontal cross-border M&A directly lesson the number of competitors for likeproducts, concentrate market, and increase possibility of enterprise abusing its marketadvantage. Vertical cross-border M&A ensure providing channel of raw materials orsemi-product or selling channel of products, spread dominating power and make it moredifficult for potential competitors to enter the market. Conglomerate cross-border M&Amay not influence market structure distinctly, but still have potential threat forcompetitors. Therefore, cross-border M&A may affect establishment and improvement ofa fair competitive order and industrial independency in the industries not mature enough,and even threaten economic safety. It is necessary and important to regulate cross-borderM&A to prevent monopoly. Since there are both advantages and disadvantages in cross-border M&A, eachcountry regulates cross-border M&A with various means among which the most efficientone is law while introducing foreign investments. No matter in developed countries ordeveloping countries, substantial rules and procedural rules are both provided to controlmonopolistic effect to be minimum. Whereas, positive induction clauses are stipulated onindustrial restrictions and exemptions. For the past forty years, globalization has beenachieved a lot by multinational enterprises. These enterprises are no longer strictlylimited by geographical and physical boundaries. Today, their economic decisions reflect 2a global perception. For the reason of economic globalization, it is possible forcompetition policies to be applied beyond national boundaries. So, conflicts ofjurisdictions and law applications are unavoidable. Therefore, in the field of cross-borderM&A, legislative convergence and cooperation in enforcement is extremely important,and this is a trend in the regulation of monopoly in cross-border M&A. From the practiceof regulation, we can conclude that legislative convergence has emerged based on thecomparison among national legislations, so is it with cooperation among enforcementbodies. The author also puts forward her opinions on the possibility of stipulating aninternational anti-monopoly code and the future of...