Following a lengthy review lasting the best part of a year, on 16 April 2013 the Ministry of Commerce of the People's Republic of China (MOFCOM) gave a conditional green light to the acquisition by Glencore International plc. (Glencore) of all of the remaining shares of Xstrata plc. (Xstrata), in which Glencore already held a minority equity interest.
The long review period is not the only respect in which the decision stands out – although review periods of a comparable length have been seen before. Particularly striking is MOFCOM's confidence in seeking an extraterritorial divestiture in circumstances where the competition arguments that might justify this could appear borderline. Additionally, it is notable that the regulator has, for the first time, taken the decision to publish a detailed scheme of the remedial commitments it accepted from the parties as a pre-condition to clearance. This document, annexed to MOFCOM's decision, offers a valuable insight into the regulator's practice and merits careful consideration. It is also a further indication of MOFCOM's ongoing and developing commitment to a more transparent process.
For inquiries related to this Legal Update, please contact Hannah Ha, John Hickin, Philip Monaghan or your usual contacts with our firm.
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