On May 15, 2020, the State Administration for Market Regulation
(“SAMR”) issued a public announcement, conditionally approving the
acquisition of shares of WABCO Holdings Inc. (“WABCO”) by ZF
Friedrichshafen AG (“ZF”, together with WABCO the “Parties”) (the
“Transaction”).
ZF, established in Germany in 1921, is a
global leader in the supply of components and parts and systems for
passenger vehicles and commercial vehicles (“CV”). WABCO is a reputable
supplier of automotive braking control systems, particularly for medium
and heavy CV.
Automobile industry in China is a
traditional industry featured with many politically powerful
State-Owned-Enterprises (“SOEs”) as well as other active and competitive
market players. During the review of the Transaction, SAMR conducted
extensive consultation with, inter alia, stakeholders, including
competitors, downstream customers and upstream suppliers. In order to
respond to sophisticated requests and comments made by those
stakeholders through SAMR and to address SAMR’s concerns, Dr. John Ren
and his team managed to proactively and efficiently communicate with the
Parties and SAMR case team, provided sufficient supplementary materials
in a timely manner and explained to SAMR the background and relevant
information tirelessly by means of emails, letters, telephone
conferences, etc..
In order to obtain the approval as early as
possible, Dr. John Ren and his team had multiple rounds of consultations
and negotiations with SAMR to better understand the case team’s
requirements and to explicitly address its concerns. T&D team
closely collaborated with ZF on the remedy proposal to reduce the
possible adverse impact of the Transaction on the competition of the
relevant markets. Finally, we reached a practical commitment proposal
with SAMR within only 4 weeks since SAMR’s disclosure of competition
concerns to the Parties, and prevent any tougher remedies.
This Transaction, conditionally approved by SAMR after another two conditional approvals handled by T&D, i.e., NVidia/Mellanox and Infineon/Cypress, can be regarded as another milestone which again demonstrates T&D’s capability of dealing with challenging, complex and high-profile merger filings which concern industries featured with strong domestic stakeholders and face the possibilities of being imposed with tougher remedies.