M&A is a shortcut for the rapid development of enterprises, but we should be cautious in choosing which enterprises to merge with. The ultimate goal of enterprise merger is to develop and strengthen itself. Of course, some enterprises have other purposes and will not make the main discussion direction again. In my opinion, there are several reasons for enterprise merger: 1 To develop and build an enterprise with the same industrial structure and further enhance its strength for its own benefit. For example, enterprises in the microwave oven industry (as we all know) 2 M&A to establish an enterprise related to their main business, not their own strengths. As the saying goes, there is specialization in the industry, learning from each other's strong points, so as to strengthen themselves.
Concept and classification of enterprise merger and acquisition
First, the concept of mergers and acquisitions
1. Merge
According to the authoritative Encyclopedia Britannica, the word merger is interpreted as: "refers to the merger of two or more independent enterprises and companies to form an enterprise, usually a dominant company absorbs one or more companies." Merger method: (1) Purchase assets of other companies with cash or securities; (2) purchasing shares or stocks of other companies; (3) Issuing new shares to shareholders of other companies in exchange for their shares, so as to obtain assets and liabilities of other companies. "
1989, 19 In February, the Interim Measures for Enterprise Merger jointly promulgated by the State Economic Restructuring Commission, the State Planning Commission, the Ministry of Finance and the State Administration of State-owned Assets stipulated: "The term" enterprise merger "as mentioned in these Measures refers to the act of one enterprise purchasing the property rights of other enterprises, which makes other enterprises lose their legal personality or change their legal entities. The merger between enterprises that is not implemented through purchase does not belong to these Measures. There are mainly the following forms of business combination: liability type, that is, under the condition of equal assets and liabilities, the merging party accepts its assets on the condition of bearing the debts of the merged party; Purchase, that is, the acquirer contributes to purchase the assets of the acquired enterprise; Share absorption, that is, the owner of the acquired enterprise will invest the net assets of the acquired enterprise as shares and become the shareholders of the acquired enterprise; Holding, that is, an enterprise realizes holding and merger by purchasing the equity of the enterprise. 1July, 992 18 The Detailed Rules for the Implementation of the Measures for the Evaluation and Management of State-owned Assets issued by the State Administration of State-owned Assets stipulates: "Business combination refers to that an enterprise takes over the property rights of other enterprises by means of debt, purchase, demutualization, holding, etc., so that the merged party loses its legal personality or changes its legal entity. "Interim Provisions on Financial Issues Related to Enterprise Merger" 1996 promulgated by the Ministry of Finance on August 20th once again explained the meaning of merger: "Merger refers to the behavior that an enterprise acquires the property rights of other enterprises by means of purchase, so that it loses its legal personality or changes its investment subject although it retains its legal personality. "
Merger can be divided into broad sense and narrow sense. In a narrow sense, merger refers to the economic behavior that an enterprise obtains the property rights of other enterprises through property rights transaction, so that these enterprises lose their legal personality and gain the control right of enterprise operation. This is equivalent to absorption and merger, and the definition of merger in Encyclopedia Britannica is similar to this. Broadly speaking, merger means that an enterprise obtains the property rights of other enterprises through property rights transactions and tries to gain control, but the legal personality of these enterprises does not necessarily lose. Merger in a broad sense includes mergers and acquisitions in a narrow sense. Interim Measures for Enterprise Merger, Detailed Rules for the Implementation of Administrative Measures for State-owned Assets Appraisal and Interim Provisions on Financial Issues Related to Enterprise Merger all adopt the broad concept of merger.
2. Acquirement of gains
Acquisition means that an enterprise buys shares or assets of another enterprise by means of payment such as cash, stocks or bonds, so as to gain control over the enterprise.
There are two forms of acquisition: asset acquisition and equity acquisition. Asset acquisition refers to the behavior that an enterprise controls another enterprise by acquiring its assets. Equity purchase means that an enterprise controls the behavior of another enterprise by purchasing its equity.
According to the proportion of the acquirer in the acquired party's equity share, equity acquisition can be divided into holding acquisition and comprehensive acquisition. Holding acquisition means that although the acquirer has not acquired all the equity of the acquired party, the acquired equity is enough to control the operation and management of the acquired party. Holding acquisition can be divided into absolute holding acquisition and relative holding acquisition. If the acquirer holds 5 1% or more of the equity of the acquired party, it is an absolute holding acquisition. Relative holding acquisition means that the acquirer holds 50% or less of the equity of the acquired party, but it can hold it. Comprehensive acquisition means that the acquirer acquires all the shares of the acquirer, and the acquirer becomes a wholly-owned subsidiary of the acquirer.
The main difference between acquisition and merger is that merger makes the target enterprise and M&A enterprise merge into one, and the legal person status of the target enterprise disappears, while acquisition often retains the legal person status of the target enterprise.
merge
Merger refers to the merger of two or more enterprises into a new enterprise. Merger includes two legal forms: absorption merger and new merger. Absorption merger refers to the merger of two or more enterprises, in which one enterprise survives and the other enterprises are eliminated, which can be expressed as: A+B+C+… = A (or B or C …). A newly established merger means that after the merger of two or more enterprises, all the enterprises participating in the merger are eliminated, and a new enterprise is established, which is expressed by the formula: A+B+C … = new enterprise.
The merger mainly has the following characteristics: first, the property owners or shareholders of the eliminated enterprises naturally become the property owners or shareholders of existing or newly established enterprises; Second, the assets, creditor's rights and debts of the enterprise destroyed by the merger shall be inherited by the surviving or newly established enterprise after the merger; Third, the merger does not need to go through liquidation procedures.
4. M&A
Merger, acquisition and merger are both related and different. For the convenience of use, people generally call it M & amp； A: M&A means that an enterprise purchases all or part of the assets or equity of other enterprises, thus affecting and controlling the operation and management of other enterprises, and other enterprises retain or eliminate their legal personality.
Second, the basic classification of enterprise mergers and acquisitions
1. Horizontal mergers and acquisitions, vertical mergers and acquisitions and mixed mergers and acquisitions
According to the industry relationship between the two parties, mergers and acquisitions can be divided into horizontal mergers and acquisitions, vertical mergers and acquisitions and mixed mergers and acquisitions.
Horizontal M&A (that is, horizontal M&A) refers to the M&A between enterprises that are in the same or horizontal related industries and produce and operate the same or related products.
Vertical M&A (that is, vertical M&A) refers to the M&A between enterprises that are in the upstream and downstream of the industrial chain, interrelated and closely connected.
Hybrid M&A refers to the M&A between enterprises that are neither competitors nor real or potential customers or suppliers.
2. Goodwill M&A and Malicious M&A.
Mergers and acquisitions can be divided into bona fide mergers and acquisitions and malicious mergers and acquisitions according to whether the consent and cooperation of the target enterprise are obtained.
Goodwill M&A (friendly M&A) means that the target enterprise accepts the M&A conditions of M&A enterprise and promises to provide help.
Malicious M&A (hostile M&A) refers to the M&A imposed by M&A enterprises on the target enterprises without knowing their M&A intentions or opposing their M&A behaviors.
3. Direct and indirect mergers and acquisitions
M&A can be divided into direct M&A and indirect M&A according to whether both parties directly engage in M&A activities.
Direct M&A, also known as agreement acquisition, means that M&A enterprises directly request M&A from the target enterprises, and the two sides negotiate through certain procedures to agree on the terms of M&A, and then achieve the purpose of M&A according to the terms of the agreement.
Indirect M&A, also known as tender offer, means that M&A enterprises do not directly ask for M&A from the target enterprise, but buy the shares of the target enterprise through the securities market at a price higher than the market price of the shares of the target enterprise, so as to achieve the purpose of controlling the target enterprise.
4. Newly established mergers and acquisitions, absorption mergers and acquisitions and holding mergers and acquisitions.
According to the legal status of the target enterprise after the completion of M&A, M&A can be divided into newly established M&A, absorption M&A and holding M&A..
The newly established M&A refers to the M&A where both parties dissolve and establish a new legal person.
Absorbing M&A means that M&A enterprises absorb M&A after the target enterprise is dissolved.
Holding M&A refers to M&A which is not dissolved by both parties but controlled by M&A enterprise.
5. Cash for assets M&A, cash for stocks M&A, stock for assets M&A and stock swap mergers and acquisitions.
According to the capital contribution of the acquirer, M&A can be divided into cash to buy assets, cash to buy stocks, stock for assets and stock replacement.
Cash-for-assets M&A refers to the M&A that M&A enterprises use cash to buy all or most of the assets of the purchased party.
Cash-for-stock M&A refers to the M&A in which M&A enterprises buy shares of the target enterprise with cash.
M&A refers to M&A in which an M&A enterprise issues shares to the target enterprise in exchange for most assets of the target enterprise.
Stock exchange M&A refers to M&A in which M&A enterprises directly issue shares to shareholders of the target enterprise in exchange for shares of the target enterprise.
6. Compulsory mergers and acquisitions and free mergers and acquisitions
M&A can be divided into compulsory M&A and free M&A according to whether M&A enterprises have the compulsory obligation to acquire the equity of the target enterprise.
Mandatory M&A refers to M&A when the M&A enterprise holds a certain proportion of shares in the target enterprise, which may manipulate the board of directors of the target enterprise and affect shareholders' rights and interests. According to the provisions of the Securities Law, M&A enterprises are obliged to make an offer to all shareholders of the target enterprise to purchase the shares of the target enterprise held by shareholders at a specific price.
Free M&A refers to the M&A where the acquirer can freely decide to acquire any proportion of the equity of the acquired party.
7. Leveraged buyouts and non-leveraged buyouts
According to whether M&A enterprises use their own funds, M&A can be divided into leveraged buyouts and non-leveraged buyouts.
Leveraged buyout refers to the M&A model in which M&A enterprises obtain the property rights of the target enterprise through the funds raised by credit, and pay off the debts with the future profits and cash flow of the target enterprise.
Non-leveraged buyout refers to the M&A mode in which M&A enterprises do not use their own funds and operating income to pay or guarantee the M&A price.
Enterprise merger and acquisition is an extremely important phenomenon in modern economic life, and it is the product of highly developed market economy. As an important asset transaction form of enterprise property rights, it is an effective expansion means for enterprises to change from asset management to capital management, and also reflects the competitive law of survival of the fittest in market economy. Enterprise merger can optimize the allocation of resources, may form economies of scale, reduce the production and sales costs of enterprises, and enhance the competitiveness of enterprises, so why should the law regulate it? The author will demonstrate from three angles: reality, economy and law.
Enterprise merger began at the end of 19, and capitalism entered the monopoly stage from the stage of free competition at the beginning of the 20th century. Nowadays, liberalization and globalization have dominated the international economy, and mergers and acquisitions occur frequently [1]. Of course, M&A can enable enterprises to expand production scale, obtain scale effect, reduce operating costs, and take advantage of the advantages of the target company in production, sales, R&D, technology and geography. And then improve the competitiveness of enterprises. At the same time, another consequence it brings is the formation of monopoly, raising product prices and building a highly discriminatory platform, which not only harms the interests of consumers, but also seriously limits market competition. It harms the development of small and medium-sized enterprises, which is the realistic reason why anti-monopoly law regulates enterprise merger.
There are also profound economic reasons for enterprise merger and anti-monopoly regulation: first, enterprise merger not only saves the cost of a single enterprise, but also saves the production cost of the whole society and improves the economic benefit of the whole society. However, in addition to the "economy" that can bring cost advantages to the overall economy, scale advantages sometimes have advantages that are not in harmony with the overall economy, that is, superior market position or unfair advantages of financial resources in competition, or they are called "financial position advantages" [2]. When an enterprise abuses its dominant position, it may bring disadvantages to the overall economy, which is the economic philosophy basis of anti-monopoly law to control enterprise merger. Secondly, judging from the relationship between enterprise merger and competition, as we all know, competition plays an important role in market economy, which can adjust production and optimize resource allocation, promote economic and technological development and protect consumers' interests. However, if the merger is not properly used, it will have anti-competitive effects: if it is excessive, it will lead to economic concentration, lead to agreements between enterprises or collusion in manipulating product prices and market sales, seriously damage the interests of consumers, and may also lead to monopoly, which may form obstacles for other competitors to enter the market, thus limiting competition, and ultimately run counter to the overall goal of pursuing overall social and economic benefits. Finally, from the perspective of game theory. As the main body of market operation, enterprises have the independent consciousness of pursuing profit maximization in market economy, and their decisions are often characterized by limitations, individuality and short-term. In contrast, the government, as the main body of market operation supervision, is the natural representative of social rationality, and its decision-making is overall, holistic and long-term. The contradiction between the social interests represented by the government and the enterprises' pursuit of maximizing their own interests determines that they will regard each other as their own game object, so the formulation process of anti-monopoly law is manifested in the game process between the government and enterprises [3], and the government must act as the social spokesperson in enterprise merger and regulate it in anti-monopoly legislation. There are profound legal reasons for regulating enterprise merger. At present, China has promulgated Company Law, Anti-unfair Competition Law and related administrative regulations, but there are still many defects in the legal regulation of enterprise merger. 1. Legislation is messy and scattered, and there is no complete legal system to adjust enterprise merger, which mostly appears in the form of administrative legislation. Relevant provisions are mainly found in the Company Law of People's Republic of China (PRC), the Regulations on the Administration of Stock Issuance and Trading promulgated by the State Council 1993, and the Detailed Rules for the Implementation of Information Disclosure of Public Stock Companies promulgated by CSRC 1993. 1989 Interim Measures for Enterprise Merger issued by the State Commission for Economic Restructuring and the State Planning Commission, 1992 Trial Measures for the Registration and Management of State-owned Assets Property Rights issued by the State Administration of State-owned Assets, the Ministry of Finance and the State Administration for Industry and Commerce (Provisions on the Registration of State-owned Assets Property Rights in Enterprise Merger), 1994 "People's Republic of China (PRC) * *" in the State Council, however, 2. From the legislative content, China's existing laws and regulations often focus on the specific operation of enterprise merger itself. For example, China's company law and securities law all stipulate the reporting obligations, merger forms, merger conditions, merger methods, etc., and most of them are superficial behavior and operation norms, and there is no detailed provision in quantity, so they do not really regulate business mergers from the perspective of the impact of business mergers on market competition. With the gradual establishment and improvement of China's market economy, the defects of this legislative model have gradually emerged. First of all, contrary to the requirements of the unified rules of market economy, different departments legislate in their own way, and the legislature forms different judgment standards for a certain social relationship; Secondly, it violates the requirements of legal integration; Furthermore, it blurs the authority of each department and reduces the authority of the law. This legislative situation urgently needs a unified anti-monopoly law to comprehensively regulate enterprise merger. 3. The draft anti-monopoly law of China on February 26, 2002 also has many defects, among which Article 26 stipulates that "the merger between enterprises with annual sales reaching a certain standard shall be reported to the competent department of anti-monopoly law of the State Council". However, the draft does not stipulate this standard, but leaves the formulation of this standard to the competent department of anti-monopoly law, thus leaving a huge problem for the implementation of the law [4]. Moreover, the provisions of the Anti-monopoly Law on controlling the merger of enterprises should not be a legal obstacle for small enterprises to accept the merger, so it should be clear that the merger of enterprises below a certain scale does not need to be reported to the competent authorities. Moreover, Article 28 stipulates that "the competent authority of anti-monopoly law shall make a decision of approval or disapproval within 90 days after receiving the application". This review cycle is too long and too mechanical. It is suggested to refer to the German legislative model and divide it into two stages according to the situation.
As far as China's national conditions are concerned, especially from the perspective of economic development and enterprise scale, it is not appropriate to regulate the merger of enterprises similar to those in developed countries. Many people think that anti-monopoly is the task after the full development of market economy, but the problem of excessive concentration of economic power in China basically does not exist. Chinese enterprises are generally small in scale, even smaller than world-renowned enterprises. The horizontal alliance between enterprises and enterprise groups has just developed. If the restrictions on enterprise merger are now stipulated within the scope of anti-monopoly law, it will inevitably affect the current industrial policy of the country. Therefore, China should encourage enterprise merger rather than antitrust. They also believe that the anti-monopoly law should not control enterprise merger on the grounds of economic globalization and improving the international competitiveness of China enterprises. The author thinks that the above two views are biased. After more than 20 years of economic system reform, China has the foundation and conditions for formulating and implementing anti-monopoly law. The price monopoly under the planned economy has been broken, the ownership structure has been diversified, and enterprises have more and more operational autonomy and decision-making power. Moreover, the anti-monopoly law basically applies the principle of rationality, and does not regulate the merger of all enterprises, but only restricts and prohibits the merger and acquisition of large enterprises that can produce or strengthen market dominance. Therefore, it is not contradictory to formulate anti-monopoly law to regulate enterprise merger and support small business alliances, expand the average scale of enterprises in China and realize economies of scale. Moreover, according to the present situation of enterprises in China, the scale is too small and the market concentration is too low. In some specific market areas, some enterprises still occupy a considerable share, such as Tsingtao Brewery Group, which accounts for about 8% of the national beer market. In the face of the accelerated pace of multinational companies entering China, there is no need for China to establish a so-called "national team" to compete with it through government formation, let alone give financial subsidies [4]. It is hard to imagine that an enterprise without training in the domestic market can win in the international competition. On the contrary, with the invasion of foreign enterprises and products into China's market, in order to regulate their behavior and make domestic enterprises in China survive under more fair, just and transparent competition conditions, anti-monopoly law should be enacted as soon as possible to regulate enterprise merger, which is also an effective way to protect domestic enterprises.
Competition is the soul of market economy, so the establishment of competition target policy is the basic guiding ideology of anti-monopoly legislation. All acts restricting competition are the objects of anti-monopoly legislation adjustment, such as abuse of market dominance, joint manipulation of the market, enterprise merger and so on. The author thinks that the first thing to do is to stipulate in the general anti-monopoly rules that the merger of enterprises should be based on the principles of openness, fairness and justice. From the content point of view, the substantive law provisions on merger should include adjustment scope, adjustment standard, legal responsibility, exemption principle and extraterritorial effect.
(I) Definition and Control of Enterprise Merger by Anti-monopoly Law At present, most countries in the world adopt multiple understandings of enterprise merger, including: (1) that is, one enterprise obtains all or a considerable part of the property of another enterprise by purchasing, assuming debts or other means; (2) the acquisition of shares, that is, an enterprise acquires a certain proportion of shares of another enterprise or holds a certain share of voting rights of another enterprise, and exerts a dominant influence on the joint-stock enterprise through holding, and the law should make appropriate provisions on the number of shares to be acquired; (3) To conclude a contract, that is, to achieve the purpose of influencing and controlling another enterprise through agreements such as contracting, leasing and entrusted operation concluded between enterprises; (4) High-level part-time job, that is, more than half of the management or supervision institutions of the enterprise have the leadership of the other enterprise at the same time, so that the two enterprises have a coordinated relationship; (5) Other forms, such as purchasing creditor's rights, concluding loan supply contracts, determining business management and investment plans, and establishing joint ventures, may bind one enterprise to another. It can be seen that the scope of enterprise merger in the anti-monopoly law is wider than that of absorption merger and new merger in the company law, including all joint ways in which an enterprise directly or indirectly has a dominant influence on other enterprises. At the same time, according to the different harmfulness of merger to the competition order, the anti-monopoly law divides merger into three types: horizontal merger, vertical merger and mixed merger. Judging from the development trend of anti-monopoly legislation in various countries, horizontal integration has become the main regulatory object of anti-monopoly laws in various countries because it excludes competition among related enterprises and improves market concentration, while vertical and mixed mergers have adopted a more tolerant attitude. For example, the US Anti-Monopoly Bureau believes that "although this type of merger has potential dangers such as eliminating competition, setting up market entry barriers and improving the possibility of enterprises, on the other hand, they may generate greater benefits, so in principle, non-horizontal integration should be positively evaluated, and administrative organs should not ban such mergers in principle." [5] In view of the current situation in China, the latter two kinds of mergers are relatively rare at present, so we should also conform to the development trend of anti-monopoly law-from comprehensive intervention to selective intervention, and focus on horizontal integration of enterprises.
(II) Substantive standards of business combination rules The government's regulation of business combination must be based on certain standards and principles, and the determination of this standard depends on a country's domestic economic situation, international competitive environment and adopted competition policies. Therefore, the regulatory standards for enterprise merger are always in constant development and change, but in general, the regulatory standards for enterprise merger have gone through a process from structural control to behavior analysis, from absolute standards to related factors, from effective control to favorable competition [6]. At present, there are two main principles in the regulation of enterprise merger by anti-monopoly law: one is the se principle, and the other is the rationality principle.
Se rule is required by the certainty of legal rules, and the determination of illegality in anti-monopoly law is largely based on this principle, which is particularly obvious in statutory countries. However, the se rule also has some shortcomings. Courts in unwritten countries such as the United States have never defined the scope of their own illegality, and the interpretation of their own illegality is subject to different interpretations of the courts [7]. Even if the acts included in the rules are defined in detail, the parties and the court will still have different opinions on the nature and consequences of the relevant acts. Moreover, its own illegality is based on assumptions, and the coincidence of assumptions and facts is not necessarily perfect. In addition, in judicial practice, blindly adopting this principle and only paying attention to some hard technical indicators in business merger will often prohibit some business mergers that do not actually pose a threat to competition. With the decline of structuralism, this mechanical principle of legal application is increasingly showing its defects. In "Mobil Standard Oil Case", the US Supreme Court put forward the principle of reasonableness, that is, in all cases, it is decided whether restrictive behavior has unreasonable restrictions on competition. The court held that the principle of rationality is to determine whether the behavior in the case is a measure prohibited by law [7], that is to say, the behavior of restricting competition is not necessarily condemned by law, and only by analyzing that it is unreasonable can it be regulated. The principle of rationality embodies the spirit of anti-monopoly law and becomes the cornerstone of anti-monopoly law in various countries. Therefore, it has become the first principle to judge whether enterprise merger constitutes monopoly, but it is not perfect. Because it has certain flexibility and flexibility, and the applicable law is uncertain, the court or the anti-monopoly department has to consider many related factors, which makes every case according to reasonable rules become a major case [8], and the court is overwhelmed by the lengthy time and complicated judgment, so the court can only reach a "perhaps reasonable judgment" when it finally applies the reasonable principle to judge the case.
To sum up, we can see that the two identification principles have their own advantages, and if they are applied separately, they will have negative effects. Therefore, China's anti-monopoly legislation should combine two principles, with rationality principle as the main principle and se rule as the supplement, which complement each other and apply the same principle.
(3) Legal sanctions
Generally speaking, foreign anti-monopoly laws generally take three measures to restrict the merger of enterprises: (1) Anti-monopoly law enforcement agencies will not approve the merger of enterprises that restrict competition. (2) The merger of enterprises that are restricting competition is prohibited. For the merger of enterprises that have restricted competition, the anti-monopoly law enforcement agency will issue a ban with exclusion measures as the main content. The main measures for exclusion are: ① ordering it to dispose of all or part of its shares; (2) Ordering it to transfer part of its business; (three) ordered to set up enterprises within a time limit; ④ Other elimination measures. (3) If the parties to a business combination still fail to implement the above ban, the anti-monopoly law enforcement agency may take the following punishment measures. The main punishment measures are ① to urge them to implement the ban with one or more consecutive fines; (two) prohibit the holding company from exercising control over its subsidiaries; (3) Dissolving the merged enterprise; (4) Stop business or order it to stop business; ⑤ The anti-monopoly law enforcement agency shall declare the merger invalid, or bring a lawsuit against the holding company for invalid establishment or merger. The Sherman Act of the United States also stipulates that anyone who suffers property losses due to violation of matters prohibited by the anti-monopoly law may request triple compensation.
At the same time, the legal measures of foreign anti-monopoly legislation on enterprise merger regulation also show that excluding and punishing enterprise merger that restricts competition are two different measures. The former focuses on restoring competition, while the latter focuses on punishing illegal acts. Punishment measures should not be taken before or at the same time as the exclusion measures, but only when the exclusion measures are ineffective.
In view of this, China's anti-monopoly legislation should adopt the following sanctions: ① issuing a ban is the most important sanction for illegal acts by the anti-monopoly authorities; (2) administrative fines, for some illegal acts that seriously violate the anti-monopoly law or violate the ban issued by the anti-monopoly organ, causing damage to social order; ③ Administrative measures, including administrative exclusion measures and punishment measures; (4) Compensation for administrative damages, that is, bringing an administrative lawsuit against those who abuse administrative power to restrict competition and compensating losses; (5) Civil damages, and the third party infringed by illegal business combination has the right to claim damages; ⑥ Criminal responsibility can be stipulated in criminal law.
(4) Monopoly exemption of business combination.
When examining whether merger should be prohibited, the anti-monopoly agency should comprehensively consider its advantages and disadvantages in order to make an appropriate judgment. Some technical indicators (such as market share and market concentration). ) can not fully measure the legitimacy of a business combination, so other related factors should be considered, which also provides a basis for business combination to obtain monopoly exemption. China's anti-monopoly legislation can refer to the following legislation. Enterprise merger can be approved if it meets one of them. First, improve market competition conditions. Mainly divided into the following situations: a, large enterprises that dominate the market replace small enterprises in other markets; B, in a monopoly or oligopoly market, strong competitors entering the market can be regarded as a new force to promote competition, thus improving the degree of market competition; C. Large enterprises with dominant market position have replaced competitors with minimal market share in the same market; D. merger of enterprises with dominant market position with enterprises on the verge of bankruptcy. Second, potential market entry. If there are no or only low barriers to entry in the market, enterprises outside the market can easily enter the market, so even if the merged enterprise occupies a large market share or even gains a dominant position in the market, it is impossible to raise the price of products at will through joint or separate means, so enterprises can be allowed to merge. Third, the overall economic and social interests. Although M&A is a market behavior that enterprises pursue to maximize their own interests, it is undeniable that it plays a certain role in promoting the whole social economy while making profits. Merger can lead to price reduction, product quality improvement and consumer interests increase, which is the purpose of anti-monopoly law. Therefore, in this case, enterprise merger should also be exempted from the anti-monopoly law.
(v) Extraterritorial effect of the provisions
The extraterritorial application of domestic anti-monopoly law originated in the United States. With the economic globalization and the liberalization of trade and investment, the anti-monopoly laws of other countries have followed the example of the United States, such as Germany, Bulgaria and Russia [9]. China has joined the WTO, and its market will gradually open to the outside world. In view of the adverse impact of international competition on China's market and consumers, China's anti-monopoly law should also learn from foreign experience and stipulate the extraterritorial effect of anti-monopoly law, especially in regulating enterprise mergers (because the impact of cross-border mergers on a country's economy is particularly obvious at present). However, this principle of effectiveness applied abroad is easily suspected of hegemonism and interference in other countries' internal affairs. Moreover, China is a developing country, and everything should be centered on economic construction, so as to minimize the possibility of conflicts in other countries. In view of this, China should carefully use the extraterritorial application clauses in its anti-monopoly law. Only those merger behaviors that obviously restrict the competition in China market will China use this clause, and formulate a series of elements that constitute monopolistic behaviors to make it transparent and convince the enterprises under its jurisdiction. At the same time, it can be supplemented by the principle of reciprocity to make jurisdiction more in line with international rules.
Market economy is a competitive economy, where there is competition, there is abuse of competition rights. Anti-monopoly law is an important means to develop market economy and regulate and restrict competition. With the continuous development of anti-monopoly law, the trend of economic integration is more obvious. In the face of fierce international competition, countries pay more and more attention to the regulation of enterprise merger, showing a trend of overall tolerance and partial severity, and the international control of anti-monopoly law is also constantly strengthening. When formulating the merger clause of anti-monopoly law, China should adhere to the principle of market economy, refer to the reasonable provisions of other countries, and reflect the new unified international practice in time.
Zhushun!