Law And Economics On The Anti-monopoly Regulation Of Foreign Capital Merge And Acquisition

Foreign capital merger and acquisition (Foreign capital M & A) is an economic phenomenon arises with the ongoing economic globalization and the formation of the world market. Excess capitals go beyond national boundaries worldwide searching for favorable investment destinations, merging and acquiring valuable target enterprises, and realizing enterprise localization, resource allocation globalization, production and marketing internationalization.The motivation of acquired side and some underlying reasons of the acquirer altogether contribute to the conduct/success of a M & A. Scale economy theory, transaction cost theory, management diversification theory are the answers to the motivation of horizontal M & A, vertical M & A, mixed M & A respectively; Capital intensive theory along with the law of average rate of return on capital are the underlying answers to the cross-border M & A instead of new investment:the profitability tends to decline due to the improvement of capital formation, capital flocks to countries with relatively low capital formation, and concentration of capital is much more efficient than accumulation of capital. Every economic theory can only explain one aspect of M & A motivation, while the combination of them can be used to explain all. The introduction of the acquirer's capital, advanced technology and corporate governance experience and the desire to explore the international market are the reasons for its counterpart's willingness to accept M & A.Foreign capital M & A has its advantages as well as disadvantages. The foreign capital tends to choose as its targets leading enterprises with famous brands, good market and great growth potential, which always leads to disappearance of a large number of national brands in the host countries and the appearance of foreign ownership or monopoly in some industries that opened earlier to foreign capital. These kinds of M & A might influence the effective implementation of national economic policy, or even pose a threat to national economic security. The national economic security issues caused by foreign capital M & A should be regulated by the National Security Act Law or the Law of Coalition and Purchasing, whereas the constraints on competition or even monopoly issues brought by M & A should be regulated by the Anti-monopoly Law because the Anti-monopoly Law is a competition law applicable to both domestic and foreign capital. Foreign capital M & A anti-monopoly review involves complex legal and economic issues and should take factors such as consumers'interests and economic impact assessment besides competition and efficiency factors. In practice, it is very difficult to apply the Anti-monopoly Law equally to domestic and foreign capital owing to different industry policies. Therefore, M & A parties are required to consult and submit to the implementing agencies prior to M & A in order to avoid the sinking cost of M & A caused by M & A failure.Large cross-border M & A often involves many nations' interests. The cost of submission is great since the parties should submit to the relevant nations for approval whose anti-monopoly laws generally have the extraterritorial force. In addition, the involvement of major national interests often lead to great differences in the review results, which will add to the uncertainty of M & A. Objectively, an internationally unified anti-monopoly law or anti-monopoly international arbitration mechanisms is needed to coordinate differences in competition laws and policies of nations and lower the cost of M & A. The successful experiences of the EU and the WTO should be learned and promoted. This thesis puts forward an asymptotic model on the building of the international anti-monopoly:the principle of comity under bilateral agreements→regional competition laws under multilateral agreements→the globally unified competition law under the framework of the WTO.