Foreign Cross-border Mergers Of Legal And Regulatory Research

Transnational merger includes transnational annexation and international purchase. Strictly speaking, transnational annexation is aimed at the thorough purchase of domestic entrepreneur assets by foreign entrepreneur, including the taking of it as the exclusive subsidiary company in China, assuming all of its creditor right and debts, and the former domestic company dis-incorporated, losing its status as a judicial person.Western countries have undergone five times of transnational annexation, which has been a major pattern for company expansion. A new boom of transnational annexation in the global area since the late 80s in twentieth century leads more and more foreign companies to choose transnational merger, rather than new building-up, as channels of investment. In the case of China, which has become the hotspot for transnational annexation due to its highly developed economic growth, foreign investors, by means of transnational annexation, acquire its technology, talents, intangible assets, resources and labor at a reduced price. Thus, entering into the Chinese market in such a smooth manner and occupying its share, foreign companies manage to turn their globalization strategy into reality. Transnational merger, on the one hand, boosts the development of Chinese economy. In order to instill new capital to the civil-funded enterprises, to make state-owned enterprises alive, to carry forward the adjustment of industrial structure, to introduce advanced technology and the experience of management. On the other hand, it poses threats to Chinese naitional enterprises national entities. Therefore, effective monitoring should be carried out on transnational annexation.The leading part for this monitoring should be the government institutions in charge of foreign capitals. Absolute anti-monopoly institutions should be established, as in the case of United States and Great Britain, to inhibit the monopoly in the process of annexation. The body being supervised includes the foreign enterprise (the investor who annexes), and the domestic enterprise(the side being annexed). To carry through the effective legal supervision on the foreign capitals in the process of transnational annexation involves quite a lot of issue.The present thesis argues that the following five issues are among the most important ones:1. Admittance system for foreign investment should be perfected. The present industrial policies are subject to moderate modifications according to WTO rules. Foreigners are prohibited from merging the domestic enterprises relating to the lifelines of national economy and trades of national security. Foreigners are encouraged to invest on the industries in infrastructure.2. In the respect of censorship system, censoring at large and sanction system will work together to prevent foreign mergers from harming Chinese economic security and from the shaping of monopoly.3. during the joint venture period, questions such as the increase of capital and shares, the percentage and the registration of capitals should be supervised in an efficient manner because this period is when the foreign businesses are about to develop into transnational mergers by being the joint ventures first.4. the Act of Anti-Monopolisation should be enforced, and the anti-monoplyinstitutions should be established.5. In accordance with the requirements of WTO, domestic and foreign capitals should enjoy equal favors for country people so that matters in foreign investment area in present China, the co-existence of superior national favors, inferior national favors and national favors could be settled.This thesis offers a few tentative remarks on the above issues so that others may come up with valuable opinions...