A merger and acquisition is a key strategy for companies seeking to expand the scope of their operations or increase their profit margins. The process is also advantageous for companies going through internal restructuring and for domestic conglomerates. Hong Kong has seen a significant amount of M&A transactions in the last years. According to an Latham & Watkins report, the majority of M&A deals in Hong Kong involve the acquisition or combining of a business with its subsidiaries. This could be as a result of a company being in financial trouble or because of an enticing decision to grow the company’s performance.
M&A deals in the country are controlled by the Companies Ordinance as well as the Competition Law. The antitrust law doesn’t contain hong kong M&A a general merger control regime, but it contains two “safe thresholds” to evaluate possible competition concerns that result from completed mergers. The government is also in the process of reviewing the current framework of antitrust laws.
The M&A market in hong kong is a multi-jurisdictional market and it is vital to know local legal, commercial realities and market practices to ensure that the transaction is smooth and efficient. It is crucial to be able to handle the various concerns and risks that may arise in cross-border M&A transactions. These include: