When merger filings are approved with conditions

By Ryan Fang and Simon Shi, Jingtian & Gongcheng
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In 2022, Chinese anti-monopoly enforcement agencies concluded 741 cases of merger filings, of which five were cleared conditionally. This brought the total number of conditionally cleared cases to 57. This article provides a brief analysis and suggestions based on regulation and practical application of the Anti-Monopoly Law and merger filing.


Among the 57 conditionally-cleared cases over the years, only one was without any foreign entity – a new joint venture between Shanghai airport and Eastern Air Logistics in 2022. All other cases involved at least one foreign business operator, and were either between foreign operators alone or between a foreign operator and a domestic one.

The cases were mainly concentrated in high-tech industries such as biomedicine and life sciences, chemistry and chemical engineering, communication technology, semiconductors, and electronic manufacturing.

The market access thresholds of these industries are relatively high, as are the market concentrations. This means that concentration is likely to have an adverse effect on full and fair market competition, so it is necessary to impose restrictive conditions.


Generally, restrictions attached to conditional merger approvals are divided into two categories: structural conditions and behavioural conditions.

merger filings approved with conditions
Ryan Fang
Jingtian & Gongcheng

The most typical structural condition is the divestment of assets and businesses, including existing independent businesses, non-independent business assets, and intangible assets such as intellectual property rights or minority equities.

The basic principle of structural conditions is to sell specific assets owned by the concentrated undertakings to new market entrants, or other existing but vulnerable market players, so that they may participate in effective competition in their markets.

Under behavioural conditions, authorities can directly regulate concentrated undertakings’ competitive behaviour by requiring them to act or not act in certain ways and maintain effective market competition.

Common behavioural conditions include sharing infrastructure (such as networks or platforms), licensing key technologies (including patents, proprietary technologies or other IP), terminating exclusive agreements and non-compete clauses, guaranteeing non-discriminatory treatment, ensuring supplies or purchases, and restricting the flow of sensitive information.

When selecting restrictive conditions, anti-monopoly law enforcement agencies in Europe and the US tend to prefer structural conditions, while authorities in China tend to prefer behavioural ones. However, they often combine both structural and behavioural conditions.


After the anti-monopoly enforcement agency reviews a merger filing and views that it may eliminate or restrict competition, it must inform the filing parties. From there, the filing parties may submit a written response and an initial remedy proposal to the agency.

merger filings approved with conditions
Simon Shi
Jingtian & Gongcheng

The enforcement agency will then carry out a series of internal evaluations, market tests and other activities to assess the initial remedy proposal. If the agency believes the proposal is insufficient, it will negotiate with the filing parties on restrictive conditions and require them to make modifications within a reasonable timeframe.

For complicated cases involving more stakeholders, the agency may hold multiple rounds of negotiations with the filing parties, with repeated revisions to their proposal before finalisation.

Additionally, the Chinese agency may also contact overseas agencies to gather information.

Once the parties and enforcement agency agree on a final remedy proposal, the agency may clear the proposed concentration with restrictive conditions.


For transactions between undertakings with high market concentration, parties should carefully consider and evaluate the likelihood of the proposed concentration being cleared without conditions in the merger filing in each relevant country/region, as well as the possible attitude that the local anti-monopoly law enforcement may adopt.

They should also adopt tailored measures to minimise the potential competition concerns raised by relevant authorities.

Before making a merger filing in China, parties should conduct prior analysis and research on previously approved merger filings in the same industry, and familiarise in advance with the attitudes of the potential stakeholders of the proposed.

They should also forecast the difficulty of the approval of the proposed concentration and its potential results, plan a reasonable schedule and form an appropriate filing strategy.

During the filing, the parties should communicate openly with the anti-monopoly law enforcement agency about their opinions towards the proposed concentration.

They should also fully discuss the competition agency’s concerns with professional teams formed by lawyers, industry experts and economists, and propose tailored and reasonable solutions to address the agency’s concerns.

Ryan Fang is a partner and Simon Shi is a counsel at Jingtian & Gongcheng


Jingtian & Gongcheng

34/F, Tower 3, China Central Place
77 Jianguo Road, Beijing 100025, China

Tel: +86 10 5809 1165

Fax: +86 10 5809 1100

E-mail: fang.ye@jingtian.com


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