February has seen several developments relevant to Asian M&A activity.
The month started with the announcement by Japan’s competition authority (the JFTC) that it was opening an in-depth phase two investigation into the proposed merger between the Tokyo and Osaka stock exchanges. This is likely to further delay the high-profile transaction at a time where it is already facing some shareholder opposition. This is the latest in a series of lengthy in-depth reviews which the JFTC has conducted in recent months, including for the merger between Nippon Steel and Sumitomo Metal Industries.
Meanwhile, China’s Ministry of Commerce (MOFCOM) announced its tenth conditional approval in the Henkel/Tiande Chemical case. This is the second time MOFCOM imposes conditions to address vertical supply issues in the context of a joint venture transaction. This follows the adoption last month of new measures aimed at detecting mergers that were consummated without obtaining the required merger approvals - a clear indication that MOFCOM intends to enforce the Chinese merger control regime vigorously.
In the second half of the month, the Competition Commission of Singapore (CCS) released its proposals regarding revisions to its Guidelines on Merger Procedures. While many of the proposals are technical in nature, the authority is putting more emphasis on the risks associated with not notifying mergers. Merger control is voluntary in Singapore, but parties are encouraged to notify in circumstances where their transaction may lead to restrictions of competition.
These developments together with increased merger control scrutiny observed in the last two years in Indonesia and Korea, are a fresh reminder that merger control regulations are increasingly relevant to M&A activity in the region. Transaction parties are well-advised to adjust to the reality of a multipolar merger control world, as competition authorities across the region each have the potential to derail a multinational merger.