Sean Liu
The Fair Trade Commission announced and prescribed the “types of merger not governed by Article 11, Paragraph 1 of the Fair Trade Law,” which became effective on the day of announcement, via the Gong-Fu-10512606761 Directive of July 18, 2016 (hereinafter, the “Directive”).
Article 11, Paragraph 1 of the Fair Trade Law provides: “Notification for any merger that falls within any of the following circumstances shall be filed with the competent authority in advance: (1) as a result of the merger the enterprise(s) will have one third of the market share; (2) one of the enterprises participating in the merger has one fourth of the market share; or (3) sales in the preceding fiscal year of one of the enterprises participating in the merger exceeds the threshold amount publicly announced by the competent authority.” However, the circumstances under the subparagraphs of Article 12 of the same law do not apply, including “6. other types announced by the competent authority” in Subparagraph 6 of Article 12. _
The Directive identifies the following four circumstances: (1) merger between an enterprise and another enterprise with which control or affiliation relations have existed; (2) merger between an enterprise and another enterprise which is affiliated with the same controlling enterprise which also controls the former; (3) assignment by an enterprise of the entirety or part of the third-party shares with voting right or capital in its possession to another enterprise with control or affiliation relationship with the assigning enterprise; and (4) assignment by an enterprise of the entirety or part of the third-party shares with voting right or capital in its possession to another enterprise controlled or affiliated by the same enterprise which controls the assigning enterprise. Article 11, Paragraph 1 of the Fair Trade Law, which requires enterprises to notify the competent authority in advance before their merger, does not apply to mergers in such circumstances.