Acquisitions by Chinese state-owned enterprises (SOEs) of companies in the United
States (US) and European Union (EU) have grown in recent years. Trade and
cross-border investment has increased and Chinese SOEs have extended their reach beyond
their domestic market. Those acquisitions, together with joint ventures between Western
companies and Chinese SOEs, have attracted substantial attention from the general public
and from scholars. Transactions with Chinese companies often generate headlines and attract
political attention. Transactions with Chinese SOEs tend to attract even greater scrutiny, and
often face special merger control and foreign investment rules. Those rules have been subject
to recent changes as Western governments have increasingly confronted such deals. Chinese
SOEs and the companies considering entering into mergers with them should be prepared for
the regulatory hurdles such transactions face.
The present article explores the potential stumbling blocks for transactions with Chinese
SOEs imposed by the merger review rules of the US Hart-Scott-Rodino Antitrust Improvements Act (HSR Act) and the European Union Merger Regulation (EUMR), as well as
the reviews of the Committee on Foreign Investment in the United States (CFIUS). It begins by providing background on SOEs generally and Chinese SOEs in particular, and a brief history of the investments made by such enterprises in the US and
Europe. The paper then discusses the regulatory framework and the hurdles transactions by
and with SOEs face in the US under HSR, with special emphasis on the reviews of
the CFIUS, and in Europe, as well as the practical considerations that entities
engaging in such transactions should keep in mind.
Read the PDF article