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Antitrust in Asia Webinar #3: M&A’s: Asian Mergers Hotchpotch

This webinar was organized by Concurrences, in partnership with Hong Kong Competition Association, Allen & Overy, Baker McKenzie, Charles River Associates, Compass Lexecon, King & Wood Mallesons, Norton Rose Fulbright, Qualcomm, and White & Case with Krystal Uy-Sia (Philippine Competition Commission), Morten Toft (Maersk), Kirstie Nicholson (BHP), Sharon Henrick (King & Wood Mallesons), Stephen Crosswell (Baker McKenzie), and Sandra Marco Colino (The Chinese University of Hong Kong).

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SYNTHESIS

The moderator, Sandra Marco Colino (Chinese University of Hong Kong), introduced the panelists and allotted each of them time to make their opening remarks.

Mr. Morten Toft (Maersk, Hong Kong) kicked off the discussion by addressing sustainability goals and competition law and the potential for competition law and merger control to play a key role in executing the sustainability agenda. He explained that under existing procedures, regulators and enforcers do not consider sustainability goals when initially identifying competition concerns. Instead, they view it as part of an efficiency defense, which is an uphill battle for merging parties. Mr. Toft suggests that competition authorities should instead consider the positive sustainability impact of a transaction as a factor when assessing the competitive effects of a merger (i.e., whether there is a competition concern at all). If they do so, this would significantly increase the chances of reaching the ambitious Sustainability Development Goals set out by the United Nations, set out by individual jurisdictions and countries, and set out in the Paris Agreement – as every year, there are any mergers, acquisitions, and joint ventures under mandatory merger control review in one or more jurisdictions. In order to achieve sustainability goals, Mr. Toft encourages a high level of consistency in enforcement across jurisdictions and regulators, as well as coherent and predictable standards. In light of the transboundary nature of sustainability impact, it is important for companies to have a high degree of legal certainty on M&A transactions that may be subject to simultaneous review by several competition authorities. In particular, regulators should determine the types of transactions that would have a positive sustainability effect; the types of documents parties would need to submit for review; and the weight that sustainability would hold relative to other considerations in a merger review. Mr. Toft explained that shipping accounts for approximately 2 to 3 percent of global carbon dioxide emissions, and shipping as a mode of transportation is used to move 80 percent of world trade. Maersk operates in the shipping and logistics industry, including container shipping, and the company’s vessels carry almost 20 percent of all goods shipped in containers globally. Every 15 minutes, a Maersk vessel carrying between 10,000 to 20,000 containers calls a port somewhere in the world. Sustainability is thus an integrated part of the way the company does business. Maersk’s overall target is to have net-zero carbon dioxide emissions from operations by 2050. With such ambitious targets, the company must look to all features of its business, including the impact of potential M&A transactions or a joint venture. Putting this into the merger control context, the company welcomes regulators to adopt proper tools to include the sustainability impact of a transaction in their merger review.

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Speakers

  • Philippine Competition Commission (Quezon City)
  • Maersk (Hong Kong)
  • BHP Billiton (Singapore)
  • King & Wood Mallesons (Sydney)
  • Baker McKenzie (Hong Kong)
  • The Chinese University of Hong Kong