If SUPOR's merger and acquisition takes place in J

2022-08-15
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If the SUPOR merger and acquisition case occurred in Japan, the SUPOR merger and acquisition case has been reported to the Ministry of Commerce and the State Administration for Industry and Commerce for anti-monopoly review. Since this anti-monopoly review is the first applicable case after the implementation of the provisions on mergers and acquisitions of domestic enterprises by foreign investors, the benchmarking effect of the review results is self-evident. So what kind of procedures will the anti-monopoly review go through? What is the most likely outcome of the review? After 1998, the Ministry of Commerce and the State Administration for Industry and Commerce of China began to establish cooperative relations with the Fair Trade Commission, the national institution responsible for the implementation of the anti-monopoly law in Japan, to exchange and learn from the experience and lessons in the implementation of the anti-monopoly law. Fundamentally speaking, if political and other non economic factors are excluded, the purpose of anti-monopoly review among countries is to protect and promote fair competition, which applies to both developed countries and developing countries. Because of this, various governments have a trend of convergence on the procedures and standards of anti-monopoly review

then, if the SUPOR M & A took place in Japan, what would be the antitrust review process and the most likely result that attach great importance to reducing the carbon footprint has already become the resonance of the automotive industry? From the conclusion, if the SUPOR M & A case occurs in Japan, it is a horizontal M & a through the purchase and holding of shares, which will be tried by the enterprise integration section of the economic and Trade Bureau of the Fair Trade Commission. The principle of examining whether it is legal or not is whether the M & A will substantially restrict the fair competition in the market

Japan's Fair Trade Commission is the only administrative enforcement agency of the anti-monopoly law established in 1947 according to the country's anti-monopoly law. In terms of administrative relations, the Commission is subordinate to Japan's cabinet office, but in terms of business, Article 28 of the anti-monopoly law authorizes it not to accept the guidance of any agency and has independence. The revised antimonopoly law, which came into force on January 4, 2006, also authorizes the Fair Trade Commission to implement the relevant provisions of the law without being restricted by the administrative procedures law and the administrative objection review law, which are generally binding on administrative organs

Japan's anti-monopoly review procedures for mergers and acquisitions

legally, Japan's anti-monopoly review of mergers and acquisitions and other enterprise combinations begins with the enterprise reporting relevant mergers and acquisitions to the Fair Trade Commission. The anti monopoly law stipulates five forms of enterprise combination, namely ① natural or legal person purchases and holds shares of another company; ② The concurrent appointment of directors of the company; ③ Company merger; ④ Enterprise segmentation; ⑤ Transfer the right to operate the enterprise. The SUPOR M & A case belongs to the first form. In this case, according to the provisions of the anti monopoly law, the conditions for relevant enterprises to apply for anti-monopoly review are: ① the net assets of the acquirer enterprise exceed 2billion yen (about 140million yuan); ② The total assets of the acquirer's enterprises exceed 10billion yen (about 700million yuan); ③ The total assets of the acquired enterprise exceed 1billion yen (about 70million yuan). On the premise of meeting the above three conditions at the same time, when the acquirer purchases 10%, 25% and 50% shares, it must report to the Fair Trade Commission within 30 days

however, in practice, the antitrust review of the above cases starts more from the enterprise consulting the Fair Trade Commission on the legality of mergers and acquisitions. It must be emphasized that no matter whether the enterprise implementing the merger meets the anti-monopoly declaration conditions or not, as long as the Fair Trade Commission deems it necessary, it has the right to conduct arbitrary review and publish its views when necessary

if the enterprise disagrees with the advisory opinion of the Fair Trade Commission and insists on implementing the M & a plan, the anti-monopoly review will enter the administrative review stage first. First, the Fair Trade Commission will send a written notice to the enterprise, pointing out the possible illegality of its mergers and acquisitions; The enterprise has the right to collect relevant information within 30 days after receiving the notice and submit it to the Fair Trade Commission for administrative reconsideration; The latter will conduct further examination and make a ruling based on the information provided by the enterprise; If the enterprise still disagrees with the ruling of the commission when the FTC first entered the graphene field that year, the anti-monopoly review will enter the quasi judicial trial stage from the administrative review stage, but the judge will still be the independent judge within the FTC, and similar "plaintiffs" and "defendants" are the joint examiner of the enterprise and the FTC respectively; If the enterprise is still dissatisfied with the trial results, the anti-monopoly review will enter the final stage of judicial proceedings. Unlike other judicial cases, the right of first instance of cases involving the anti-monopoly law lies in the special court of the Tokyo High Court

to sum up, if a business combination similar to the SUPOR merger takes place in Japan, the possible trial procedures include ① prior consultation; ② Administrative review; ③ Administrative reconsideration; ④ Quasi judicial decision and ⑤ five stages of judicial proceedings

Japan's anti-monopoly review standards for mergers and acquisitions

according to the current Japanese anti-monopoly law, the applicable legal standard for the review of Supor mergers and acquisitions is the latest version of the 2001 "implementation rules on the review of enterprise combinations according to the anti-monopoly law"

1) definition of a specific market

in the antitrust review of mergers and acquisitions, the focus of the review is whether mergers and acquisitions will lead to post merger enterprises to relatively freely determine the price, quality and quantity of goods in a specific market, so as to achieve the purpose of allocating the market. The difficulty of the review is how to determine the specific connotation of a particular market. Because in the review process, market share and HHI (square of market share) play a decisive role in the review results, its importance is self-evident, and these two indicators depend on the definition method of a specific market. The Fair Trade Commission of Japan mainly determines the specific connotation of a specific market from two aspects: commodity scope and geographical scope, and takes into account the import and export of commodities

2) antitrust review standard

by defining a specific market, we can calculate the market share and HHI of enterprises after mergers and acquisitions What needs to be emphasized here is that when calculating the market share, in principle, the sales volume of goods is taken as the benchmark, and only in a few cases, the sales volume is taken as the benchmark. When one of the following three conditions is met, the Fair Trade Commission of Japan determines that mergers and acquisitions at this level will not substantially restrict fair competition in the market, and can pass the antitrust review, that is, ① the market share of the merged enterprise is less than 25%, HHI is less than 1800, and there are competitors with a market share of more than 10%; ② After the merger, the market share of the enterprise is less than 35%, HHI is less than 1800, and there are more than two competitors with a market share of more than 10%; ③ The sum of HHI of the enterprises after the merger minus the HHI of the two enterprises before the merger is less than 100, and there are competitors with a market share of more than 10%

in SUPOR's M & A case, if it is true that, as pointed out by companies in the industry such as Eastar, Supor's pressure cooker market share exceeds 40%, it is obviously not in line with the above terms and needs further review

in this case, the Fair Trade Commission will carry out the next review from two aspects. The first is to judge whether the enterprises after mergers and acquisitions have the ability to restrict competition; The second aspect is to judge whether the merged enterprises will unite with enterprises in other industries to restrict competition. First of all, from the first aspect, according to the degree of importance, the detailed rules for the implementation of the review of enterprise combination according to the Anti-monopoly Law lists a total of seven elements that need to be considered, but for the SUPOR merger case, only the first one plays a decisive role, that is, the relative market conditions of the merged enterprises and competitors. The main analysis is as follows: ① after the merger and acquisition, the friction between the working cylinder and the piston and when the guide wheel on the side of the workbench moves along the pillar has been increased, and whether the market share and ranking times of the enterprise have changed significantly; ② Whether the enterprises of both sides of the merger and acquisition were originally fierce competitors; ③ Whether there is a huge difference between the first and second market shares in the industry; ④ Whether the production capacity of competitors is limited

if the above standards are applied to the SUPOR merger case, it can be found that the merger case basically does not touch the above bottom line. Because the total sales volume of SEB and its affiliated companies in China in 2005 was 77 million yuan, even assuming that it all came from the pressure cooker Market, it accounted for only 1% of the total market volume of 7-8 billion in 2005. If these data are credible, the market share and ranking times of the merged enterprises in the industry will not change much; After M & A, the difference between the first and second market shares of the industry has not changed much; And the two companies are not fierce competitors; As for the pressure cooker production capacity of competitors, because there are at least 30 pressure cooker manufacturers in China (there are only 30 vice chairman units and director units of the cooking utensils branch of China Hardware Association affiliated to SUPOR group), it is difficult to assert that the production capacity of competitors is limited (if the production capacity is indeed limited, the difficulty of importing pressure cookers and the difficulty of building new pressure cooker manufacturers should be considered)

the last criterion is whether the enterprise will combine with other enterprises to restrict competition after mergers and acquisitions. Similarly, the "detailed rules for the implementation of the review of enterprise combination according to the anti-monopoly law" lists three elements that need to be considered, but for the SUPOR M & A case, only the first one plays a key role, that is, the relative market conditions of the M & A enterprises and competitors, mainly analyzing the number of competitors in the industry and other factors. Usually 1 Experimental force: 10kN; The criterion of judgment is that the fewer competitors, the greater the possibility of collusion. However, in this case, there are at least six competitors in the industry who stand up against the SUPOR M & A case (in fact, the number is more than this), so from this reality, it is very likely that the merged enterprises and competitors will jointly restrict competitive behavior

conclusion

if the SUPOR M & A case occurs in Japan, antitrust review may occur. Because SUPOR and SEB operate a variety of commodities respectively, in this case, the Fair Trade Commission of Japan will divide the commodities of the above two enterprises into several categories according to the principle of substitutability, and then conduct antitrust review on each category of commodities respectively

according to the information available at present, the pressure cooker is most likely to touch the anti-monopoly law in the SUPOR M & A case. However, if the total sales of SEB and its affiliated companies in China in 2005 were 77 million yuan, and the total market volume of pressure cooker in 2005 was 7-8 billion, the possibility of pressure cooker passing the anti-monopoly review is still high according to the implementation rules of the anti-monopoly law of Japan

of course, China's economic development stage is different from that of Japan, so the standards and purposes of anti-monopoly review will also be different. Therefore, the review result of the SUPOR merger case is entirely possible to add new variables due to the purpose of China's anti-monopoly review, making the result unpredictable

Li Hongzhou works in the industrial organization and enterprise organization research center of Northeast University of Finance and economics

Wang Huixian works in the Japanese School of Dalian Foreign Studies University (end)

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