A merger and acquisition is a crucial strategy for businesses looking to expand their operations or increase their profit. The process can also be beneficial for companies that are going through internal transformations and also for domestic conglomerates. Hong Kong has seen a significant number of M&A deals in recent years. According to a Latham & Watkins report, the majority M&A deals in Hong Kong involve the acquisition or combining of a business with its subsidiaries. This could be the result of a company having financial difficulties or due to an enticing decision to grow the company’s performance.

M&A deals in the country are controlled by the Companies Ordinance as well as the Competition Law. The antitrust law doesn’t provide an overall framework to control mergers, but it does provide two „safe-harbor thresholds“ to evaluate the possibility of competition concerns that could digital innovations streamlining due diligence processes arise from mergers that have been completed. The government is also looking at its current antitrust framework laws.

To ensure a smooth and efficient transaction, it is essential to understand the local legal, commercial and market realities. It is also crucial for you to be aware of a wide range of problems and risks that may arise in cross-border M&A transactions. These include: