Takeover Regulation in China: Striking a Balance between Takeover Contestability and Shareholder Protection

Abstract

The paper conducts a concise yet comprehensive examination of the Chinese regulatory regime for takeovers of listed companies, covering important rules such as the mandatory bid rule, tender offer rules, disclosure of substantial shareholding, and takeover defences. In evaluating the Chinese takeover law, particularly the amendments made in 2014, the paper adopts a comparative approach, while takes into consideration China’s local conditions. The paper argues that a key policy goal of Chinese takeover law is to facilitate the use of takeovers to achieve industrial upgrading and economic restructuring, and that it is important to strike a proper balance between takeover contestability and shareholder protection.