Unusual Remedies a Feature of Mofcom’s 6th Conditional Clearance Decision

China's Ministry of Commerce (Mofcom) has approved the proposed acquisition by Swiss pharmaceutical company Novartis AG ("Novartis") of world-leading eye care company Alcon Inc. ("Alcon"), subject to conditions.

The decision, announced on 13 August 2010, is Mofcom's first published merger control decision in almost 10 months, and the sixth time that Mofcom has included conditions in its approval of an M&A transaction under China's Anti-Monopoly Law. Notably, all of these decisions have applied to transactions between foreign multinationals (and the single prohibition decision that has been announced concerned a foreign takeover of a domestic Chinese business).

The latest decision has attracted particular scrutiny because of the unusual nature of the conditions attached to Mofcom's approval. In this legal update, we examine the decision and identify the key learnings that the business sector can draw from it.