A merger and acquisition is a crucial strategy for companies looking to increase the size of their operations or boost the amount of money they earn. It is also advantageous for businesses that are going through internal transformations and also for domestic conglomerates. Hong Kong has seen a significant amount of M&A transactions in the last years. According to a Latham & Watkins report, the majority of M&A deals in the region involve buying or merging of a company with its subsidiaries. This could be due a financial issue or a strategic decision made to increase the profitability of a company.
M&A deals in the country are governed by the Companies Ordinance as well as the Competition Law. The antitrust law doesn’t include a general merger-control policy, but it does contain two “safe harbor thresholds” to assess potential competition concerns arising from completed mergers. The government is also reexamining its current framework of antitrust laws.
In order to ensure smooth and efficient transactions it is crucial to understand the local legal, commercial and market realities. It is crucial to be able to handle a variety of concerns and risks that may be encountered during cross-border M&A transactions. These include: