Recently, Shandong Iron and Steel Group Co., Ltd (“Shandong Steel” hereafter) has obtained a notice from the Ministry of Commerce of the People’s Republic of China, Anti-monopoly Bureau, stating that the Bureau will not initiate further investigation regarding Shandong Steel’s acquisition of equity from Tonkolili Iron Ore (SL) Ltd. This official notice indicates that Shandong Steel has passed the anti-monopoly investigation for merge control; Shandong Steel can officially begin the delivery of equity and control over in order to complete the deal.
Shandong Steel invested 1.5 billion USD in 2011 to acquire equities from Tonkolili Iron Ore (SL) Ltd and its affiliates; however, due to the funding constraints of African Minerals Ltd – the major shareholder of Tonkolili Iron Ore (SL) Ltd – the iron mine entered a shutdown state. In order to protect initial investments, Shandong Steel decided to take full acquisition of Tonkolili Iron Ore (SL) Ltd, aiming to restore the production of iron ore as soon as possible. This acquisition has reached the thresholds for prior notification of concentrations of undertakings as enacted by China’s anti-monopoly law and regulations, and therefore a prior notification must be filed with the Ministry of Commerce. Beijing DHH’s lawyers acted upon entrustment, served as Shandong Steel’s agent for the prior notification, and were responsible for assisting the client with the prior notification work.
Shandong Steel was incorporated on March 17, 2008 with a registered capital of 10 billion RMB; it is now under direct supervision by the Shandong Provincial People’s Government State-owned Assets Supervision and Administration Commission. Relevant market research shows that Shandong Steel’s steel production is ranked 12th worldwide and 7th within China.
DHH’s senior partner, lawyer Liu Kejiang acted as the project manager of the prior notification case, and lawyer Wang Ziyi assisted. Lawyers in charge of this project diligently fulfilled their duty on the basis of a deep understanding of all the regulatory documents concerning prior notification, promulgated by the State Council’s anti-monopoly law enforcement agencies. DHH’s lawyers also conducted thorough research about iron ore as well as the steel market, while actively communicating with the Anti-monopoly Bureau. Ultimately, the prior notification successfully passed investigation.