China: Conglomerate mergers are facing heightened scrutiny

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For the past three years (2017–2020), it appears that conglomerate mergers were under more scrutiny in China than in the European Union (“EU”) or the United States (“U.S.”). This article mainly examines five mergers—namely, HP/Samsung, Essilor/ Luxottica, KLA/Orbotech, Infineon/Cypress and Nvidia/Mellanox—which were conditionally approved in China but were cleared without any remedies in the EU or the U.S. Specifically, the article reviews the factors the Chinese antitrust regulators examined in the conglomerate mergers, opine on the rationale behind the Chinese antitrust regulators drawing different conclusions in these mergers, and summarizes conditional remedies imposed by the Chinese antitrust regulators. The authors also consider the Chinese regulators’ concerns and any potential impact on global mergers, and anticipate conglomerate mergers, especially those involving digital technology, which are likely to be under rigorous scrutiny by Chinese regulators in the future.