An increasing number of M&A deals in China have prompted the government and other authorities to promulgate new rules concerning the acquisition of domestic enterprises.

The government is also working on anti-monopoly legislation to curb risks inherent in M&A cases.

According to the new rules on the acquisition of Chinese enterprises by foreign investors, which took effect on September 8,2006, central authority approval is required in three cases.

The three cases are: the foreign bidder has a market share of over 20 percent and annual sales in China of over 1.5 billion yuan (190 million dollars); the market share of one of the parties to the deal will reach 25 percent after the acquisition; the foreign bidder has acquired more than 10 Chinese enterprises in one year.

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