A merger and purchase is a critical strategy for companies looking to expand their operations or increase their profits. It is also beneficial for companies that are going through internal restructuring, as well as for domestic conglomerates. Hong Kong has seen a significant amount of M&A deals over the last few years. According to a Latham & Watkins report, the majority of M&A deals in the region involve the buying or combining of a company with its subsidiaries. This may be a result of a company facing financial trouble or because of a strategic decision to boost the business.
M&A transactions in the United States are governed by the Companies Ordinance and the Competition Law. The antitrust law doesn’t include a general merger-control system, but it does include two “safe harbor thresholds” for the assessment of potential competition concerns arising from completed mergers. Moreover the government is in the process of reviewing its current framework of broader antitrust laws.
The M&A market in Hong Kong is a multi-jurisdictional market and it is crucial to understand local legal, commercial realities and market practices in order to ensure that the transaction process is smooth and efficient. It is important to be able address the various concerns and risks that may occur during cross-border M&A transactions. These include: