A. Scope

A. Scope

What is a merger, and what are the forms of it?

Generally speaking, mergers may take the following forms:

1. Transactions that involve the merging of two or more undertakings into one.
2. The acquisition of one undertaking (or part of it) by another undertaking.
3. The forming of a joint venture.
4. The acquisition of assets by one undertaking from another undertaking.

[Source: Commission’s Guideline on the Merger Rule Para 2.1]

What is the Merger Rule?

Under the Competition Ordinance, an undertaking must not directly or indirectly carry out a merger that has, or is likely to have, the effect of substantially lessening competition in Hong Kong.

[Source: Commission’s Guideline on the Merger Rule Para 1.1]

What is the scope of application of the Merger Rule?

For the time being, the Merger Rule only applies when an undertaking that directly or indirectly holds a carrier license under the Telecommunications Ordinance (Cap. 106) is involved in a merger.

The Merger Rule does not apply to a merger if the economic efficiencies (further explained below) that arise or may arise from the merger outweigh the adverse effects of any lessening of competition in Hong Kong.

[Source: Commission’s Guideline on the Merger Rule Para 4.2]

Under what circumstances would the merger raise competition concerns?

This is a complicated question. Please refer to the Commissioner’s Guideline on the Merger Rule.