The Ministry of Commerce, Chinese Commission and the State Administration of Taxation, the State Administration for Industry and Commerce, the State Administration of Foreign Exchange Bureau jointly issued the "foreign investors in listed companies strategic investment management measures" (hereinafter referred to as the "war vote" management measures ""), this provides a clear legal basis and operational guidelines for foreign investors to invest directly in listed companies in the a-share market. According to the provisions of the second regulations on investment and war management, this method is suitable for foreign investors to acquire the shares of a-shares through a long-term strategic M&A investment by a listed company. According to the provisions of the fifth regulations on the administration of war and investment, the proportion of shares obtained after the completion of the investment is not less than ten percent of the shares issued by the company, except that the special trades have special provisions or those approved by the relevant competent departments; The shares of listed companies acquired are not transferable within three years.
According to star technology (300256), it buys assets from NEW POPULAR TECHNOLOGY CO.，LTD., the demand for a 10% stake in foreign investors has broken through.
In addition, according to the above cases, the shareholding ratio of the listed companies of a-share listed companies in the strategic investment of overseas investors should be handled in accordance with the three-year lock-up period if the shareholding ratio reaches 10%. If the shareholding ratio is less than 10%, the pledged equity transfer lock can be held for 12 months.
A practical breakthrough on the cross-border exchange of shares under the merger and acquisition regulations
In accordance with the relevant provisions of chapter 4 of the ministry of commerce's regulations on the acquisition of domestic enterprises by foreign investors (business department no. 6 of 2009) (hereinafter referred to as "merger and acquisition rules"), foreign investors with equity as a means of payment in mergers and acquisitions company, it refers to the shareholders in its holdings of foreign companies overseas company, or outside the company with its issuance of shares, as a means of payment, and then buy the share of the shareholders of the domestic company or the domestic company's rights to issue shares.
Foreign investors shall submit the approval of the ministry of commerce to the domestic companies for the equity acquisition. But so far, the cross-border exchange under the merger and acquisition rules has not been successfully approved by the ministry of commerce.
In the literal sense of the law, the cross-border exchange includes the following form: the overseas investors use the equity of foreign companies as payment means to purchase additional shares in domestic companies.
As mentioned above, there are few cases in which foreign investors have obtained approval from the SFC and the ministry of commerce for the exchange of shares of overseas companies with a-share listed companies. The main cross-border exchange is almost impossible to get approval from the ministry of commerce, it is also a welcome breakthrough for the hotel to obtain approval from the ministry of commerce. Especially in the current environment of strict government restrictions on foreign exchange swap and transfer, it is an important positive for A listed company to make foreign acquisitions as a means of payment. By diversifying the means of overseas mergers and acquisitions of a-share listed companies, overseas mergers and acquisitions can issue shares to avoid (or at least delay) the pressure of exchange. In addition, at present, A shares can export the high valuation foam of a-shares to the international market and reduce the systemic risk in the domestic capital market.
Thus, the ministry of commerce has made a more relaxed understanding of the cross-border exchange of shares under the provisions of merger and acquisition. It does not explain the cross-border exchange of shares in a-share listed companies by foreign investors in the equity exchange of overseas companies. In the context of fully respecting the original intention of the legislation, considering the current macro-regulatory environment which restricts foreign exchange exit, the innovative practice of overseas acquisition and payment methods of a-share listed companies is considered. We have reason to believe that this will open a door for overseas acquisitions of a-share listed companies, and more and more similar cases will be seen in the future.
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