- (a) the arrangements for the creation of the merger take place outside Hong Kong;
- (b) the merger takes place outside Hong Kong; or
- (c) any party to the arrangements for the creation of the merger, or any party involved in the merger is outside Hong Kong.
PART 2
The Merger Rule
3. Mergers substantially lessening competition prohibited
(1) An undertaking must not, directly or indirectly, carry out a merger that has, or is likely to have, the effect of substantially lessening competition in Hong Kong.
(2) For the purpose of this section, a merger takes place if—
- (a) 2 or more undertakings previously independent of each other cease to be independent of each other;
- (b) one or more persons or other undertakings acquire direct or indirect control of the whole or part of one or more other undertakings; or
- (c) an acquisition by one undertaking (the “acquiring undertaking”) of the whole or part of the assets (including goodwill) of another undertaking (the “acquired undertaking”) has the result set out in subsection (3).
(3) The result referred to in subsection (2)(c) is that the acquiring undertaking is in a position to replace the acquired undertaking, or to substantially replace the acquired undertaking, in the business or in part of the business concerned (as the case requires) in which the acquired undertaking was engaged immediately before the acquisition.
(4) The creation of a joint venture to perform, on a lasting basis, all the functions of an autonomous economic entity also constitutes a merger within the meaning of subsection (2)(b).
(5) The prohibition imposed by subsection (1) is referred to in this Ordinance as the “merger rule”.
4. Application of merger rule
The merger rule applies only in the following cases—
