China Issues New Guidelines on the Implementation of Divestiture Commitments

When China's Ministry of Commerce ("MOFCOM") approved Pfizer's $68 billion acquisition of rival pharmaceutical company Wyeth in last September, the Chinese anti-trust authority for the first time applied business divestiture as a structural remedy in its merger control review. According to MOFCOM's conditional clearance decision, Pfizer was required to divest its PRC swine mycoplasmal pneumonia vaccine business to an approved third party to address anti-competitive concerns. To satisfy the condition, Pfizer sold its swine vaccine business in China to Harbin Pharmaceutical Group for approximately US$50 million in May. There are however concerns that divestiture has been applied without any official guidance which should have been put into place to ensure consistency of implementation of future divestiture in conditional clearance decisions. To address these concerns, on the 5th of July MOFCOM issued its Tentative Provisions on the Implementation of Assets or Business