China’s Doing Business With Global Giants, With Help of Chinese Lawyers.

It’s no secret that the U.S. owes money to several countries*.  Japan is first in line, with $585.9 billion. China is close behind, with a reported $541.0 billion in monies loaned.  That’s reason enough for western firms to want to keep an eye on China’s doings.    Another reason might have to do with recent ventures by large firms into Chinese markets.  This, despite China’s recent competition policy reforms.

The region’s three-year old anti-monopoly law is proving to be certain dealmakers’ hugest obstacle, but at least one Chinese firm is—dare we say the word—monopolizing China’s antitrust practice.

Recently, reported, Nestle S.A.—the Vevey, Switzerland-based conglomerate—announced that it would pay $1.7 billion to acquire a controlling interest in a Chinese candy company that, although not very well known to many westerners, is a top Chinese confectioner, according to the New York Times.

For China, this is one of the biggest deals ever by a foreign company.  For Nestle, it will solidify its presence in what everyone concedes is an important economic market.

“Best known for its instant coffee brands, bottled drinks and baby foods, Nestlé is teaming up with Hsu Fu Chi International, a maker of chocolate, candies and pastries popular in China, to create a joint venture that Nestlé said would “greatly reinforce” its presence in China,” we read in the New York Times’ DealBook.

The leading Chinese law firm in antitrust matters is King & Wood, whose Susan Ning (pictured here) has been “aiming to guide” Nestle around the fairly new antitrust law.   A few years ago, another multinational tried a similar acquisition and it didn’t go so well.

Regarding “Coca-Cola Corp.’s $2 billion bid for China Huiyuan Juice Group in 2008 ,” notes, ” the Chinese Ministry of Commerce (MOFCOM) shot it down on antitrust review.”

Ning ‘s group has a good track record. Thus far, they’ve been able to help their Nestle client see their way clear to staking a claim for another Chinese company.  Nestle now owns 60 percent of Fujian-based Yinlu Foods Group.  The company, worth in the vicinity of $600 million and $1 Billion, was not the first merger approval in the area.

Ning’s group also guided Pfizer, Inc. through its acquisition process when it merged with Wyeth Pharmaceutical Co., Ltd.   According to Bloomberg Business Week, Wyeth “was formerly known as Suzhou Lederle Pharmaceutical Co., Ltd. The company was founded in 1991 and is based in Suzhou, China.”

And it’s now a subsidiary of the U.S.-based Pfizer Inc.

Ning sees her firm as the primary player in the competition law practice area and puts the hierarchy bluntly.  “I don’t think we have any competition in China,” she says.




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