CSRC: Encouraging private equity funds to participate in mergers and acquisitions of listed companies

On May 16, the China Securities Regulatory Commission revised the "Management Measures for Major Asset Restructuring of Listed Companies" to deepen the reform of the mergers and acquisitions market for listed companies. It mentioned the encouragement for private equity funds to participate in the mergers and acquisitions of listed companies. The lock-up period for private equity funds' investment term and acquisition of shares has been "reverse linked". It is specified that if the private equity fund's investment term reaches 48 months, the lock-up period in third-party transactions is reduced from 12 months to 6 months, and the lock-up period for shareholders other than the controlling shareholder, actual controller, and their related parties in the restructuring and listing is reduced from 24 months to 12 months. In addition, in accordance with the new "Company Law" and other regulations, adaptive adjustments have been made to the relevant provisions of the "Restructuring Measures". It also mentioned the establishment of a staged payment mechanism for restructuring share consideration. The validity period of the registration decision for one-time registration and issuance of shares for asset acquisition has been extended to 48 months. There is an increase in tolerance for changes in financial conditions, industry competition, and regulation of related transactions. A new simple restructuring review procedure has been established. It is specified that restructuring transactions under the simple review procedure do not require the approval of the Securities Exchange Mergers and Acquisitions Committee, and the China Securities Regulatory Commission will make a decision to register or not register within 5 working days. Following the revision of the "Management Measures for Major Asset Restructuring of Listed Companies," various measures in the "Opinions on Deepening the Reform of the Mergers and Acquisitions Market for Listed Companies" have been fully implemented, further unleashing market vitality. Since the publication of the "Six Measures for Mergers and Acquisitions," the scale and activity of the mergers and acquisitions market have significantly increased, with over 1400 disclosed asset restructuring cases by listed companies, including over 160 major asset restructuring cases. This year, listed companies have been more actively planning asset restructurings, with over 600 disclosed cases, a 1.4 times increase compared to the same period last year; among them, there are about 90 major asset restructuring cases, a 3.3 times increase compared to the same period last year. The completed transaction value of major asset restructurings has exceeded 200 billion yuan, a 11.6 times increase compared to the same period last year, effectively playing the role of capital market. Next, the China Securities Regulatory Commission will continue to carry out the implementation of the "Restructuring Measures" and further stimulate the vitality of the mergers and acquisitions market.