CHINA Law and Practice Contributed by: Lingyun Dai, Tao Liu, Xueyong Liao and Yuzhou Shang, Lifeng Partners
Lifeng Partners 39/F, Tower 2, Jing An Kerry Centre 1539 West Nanjing Road Shanghai China Tel: +86 21 6288 6183 Email: inquiry@lifenglaw.com Web: www.lifenglaw.com
1. Transaction Activity 1.1 Private Equity Transactions and M&A Deals in General In the last few months, a very noticeable trend in the Chinese market has been that foreign capital is flow - ing out, while Chinese private equity firms are step - ping in to acquire the assets being sold off by the exiting foreign investors. 1.2 Market Activity and Impact of Macro- Economic Factors In terms of sectors, the heat of investment and financ - ing in technology, especially the robotics industry, is obvious. In contrast, the large-scale industry, manu - facturing and consumer sectors are more popular in the mergers and acquisitions (M&A) market. Affected by geopolitical factors, foreign companies and foreign capital are selling off their assets in Chi - na. As a result, domestic Chinese capital is acquiring these assets. It is worth mentioning that in the last few months, private equity firms have been more active on transactions involving Chinese listed companies compared to before. For example, the acquisition of Tiamaes, a Chinese A-share listed company, by Qim - ing Capital is a very clear case in point. 2. Private Equity Developments 2.1 Impact of Legal Developments on Funds and Transactions In recent years, with the rapid development of indus - tries such as information technology and artificial intelligence, China has introduced a series of new
regulations in compliance, especially in data compli - ance, privacy protection and patent protection, mov - ing towards stricter supervision. Particularly in cross-border transactions, whether traditional deals or technology transfers, geopolitical factors have increased the uncertainties and led to stricter compliance and regulatory requirements. As a result, private equity investors are more cautious in selecting transaction counterparts or target com - panies. 3. Regulatory Framework 3.1 Primary Regulators and Regulatory Issues The Antitrust Bureau of China, as the regulatory body responsible for conducting antitrust reviews of con - centrations of undertakings in accordance with the law, is tasked with providing consultations, accepting filings related to antitrust reviews of concentrations of undertakings, and conducting corresponding antitrust hearings, investigations and reviews. In recent years, the bureau has increasingly promoted simplified pro - cedures for filings of concentrations of undertakings, significantly streamlining the process and reducing the timeline for such filings. From this perspective, it has actually fostered the development of the M&A market. There is no difference in how national security (or oth - er) regulators look at financial investors depending on whether or not they are sovereign wealth investors. Sanctions are becoming increasingly stringent. Influ - enced by geopolitical factors, China may impose
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