Remedies Regime In Conglomerate Merger

Since the implement of the anti-monopoly law till Dec. 31, 2014, the Chinese Ministry of Commerce had received 990 merger cases, of which only 2 cases were directly ban, 24 were conditionally approved. As to Conglomerate merger the number is respectively 1 and 2. It’s important to take remedies measure in conglomerate merger which has hidden anti-competitive effect relative to horizontal or vertical merger. However, the research on the anti-competitive theory of conglomerate merger and relevant provisions is almost in a blank state. The remedies regime is also imperfect. This paper will analyze the anti-competitive theory of conglomerate merger, the practice of remedies regime in conglomerate merger and the situation of the this in China. At the end of this paper I will try to put forward the perfect suggestions in such system in our country. Aim to make the conglomerate merger remedies goes well in our country. Hope can help to the improvement of the system of concentration. This paper structure is mainly divided into the following four parts:The first part, interpreted the concept of conglomerate merger which include three types, elaborated the competition concerns in different merger types. Then analyzes the anti-competitive theory of conglomerate merger with actual cases, especially the potential entrant theory and the portfolio-effects theory. The potential entrant theory focused on the number of potential competitors in the target market changed before and after the merger. The portfolio-effects theory focused more on the anti-competitive behavior and the change of market forces of the enterprises. The analysis on the anti-competitive effects of conglomerate merger is the basis of merger remedies.The second part, analyses the remedies regime, summarizes the concept and function of the remedies regime. Remedies measure can be divided into structural remedies and behavioral remedies. List some of the major measure, like divest terms, firewall terms, fair trade terms and the price ceilings terms. Elaborate the behavioral merger remedies in conglomerate merger and the existing problem of uncertainty in the results, the difficulty in enforcement and regulation and the high total cost.The third part, analyzes the legislation and enforcement of remedies regime in China at present. Found that the remained problem in the aspect of legislation is that some parts still missing, some rules too principle and the legal hierarchy need to be improved. In the aspect of enforcement, the existing phenomenon is that few remedy measures were taken to conglomerate merger cases in China, the Ministry of Commerce is more receptive to behavioral remedies and the behavioral remedies is too flexible. The following article analyzes two conglomerate merger cases conditionally approved by the Ministry of Commerce and then find the progress and deficiency in the practice of the anti-competitive theory and merger remedy.The forth part, put forward the conglomerate merger remedy perfect suggestions, mainly including establishing the anti-competitive theory framework, selecting the type of merger remedies carefully, perfecting the supervision trustee system, establishing the case tracking system and the remedies review system, etc.