Letting the mighty acquire
China’s big tech companies just got some good news.
On Friday, the State Council published its revised regulations for mergers and acquisitions (M&A).
Some context: These updates had been in the works for 20 months and were the subject of heated debate within the bureaucracy.
In the end, the State Council backed off one of the most controversial updates.
- Earlier versions of the updates had essentially proposed making any deal involving a company with annual revenues over RMB 100 billion subject to review by the authorities.
- Big companies complained vociferously, and the clause was dropped from the final version of the regulations.
The final version also raises the combined revenue thresholds for triggering a review.
Get smart: The RMB 100 billion threshold had originally been included to try and keep China’s big tech companies in check.
- The fact that it was struck from the final version is further proof that authorities have taken their foot off the neck of tech companies.
Get smarter: This is also good news for other large and private companies – as well as for scrappy startups hoping to get acquired.
Get real smart: With the economy in the dumps, officials are more inclined to make pro-business policy, like the changes above.
- That’s good news for MNCs in general, who should have an easier time gaining the ear of government.