China’s SAMR Publishes Three Typical Cases of Anti-Monopoly Concerns in Assessing Corporate Acquisitions
Published 5 December 2025
Yu Du
On 4 December 2025, the State Administration for Market Regulation (SAMR) announced three typical cases of M&A subject to anti-monopoly review. The publication aims to enhance transparency, provide guidance to market participants, and promote compliance in corporate mergers and acquisitions. Building upon existing disclosure mechanisms, including simplified case announcements, conditional approvals, prohibitions, and unconditional approval lists, SAMR has increased public access to non-simplified cases that were unconditionally approved.
The selected cases cover a variety of industries and transaction types, such as horizontal concentration in the industrial gas sector and vertical concentration in the pharmaceutical retail sector. By highlighting these cases, SAMR seeks to improve the efficiency and quality of filings and foster a predictable and transparent regulatory environment for investment and M&A activities.
The cases presented are not full reproductions of the underlying facts but focus on key points of concern and competitive analysis approaches used by anti-monopoly authorities, including procedural considerations, control change assessment, relevant market definition, horizontal and vertical relationships, market share and concentration estimations, evaluation of unilateral, coordinated, and foreclosure effects, and review of supporting evidence.
Case 1: Hangzhou State-owned Capital Investment & Operation Co., Ltd. Acquires Zhejiang Yingde Holdings Group Co., Ltd.
Case Overview:
Acquirer: Hangzhou State-owned Capital Investment & Operation Co., Ltd.Target: Zhejiang Yingde Holdings Group Co., Ltd.Existing Shareholder: Yingde Gas Hong Kong Ltd.
The acquirer intended to acquire part of the target’s equity. Before the transaction, Yingde Gas Hong Kong Ltd. had sole control over Zhejiang Yingde Holdings Group Co., Ltd. After the transaction, control would be shared between Hangzhou State-owned Capital Investment & Operation Co., Ltd. and Yingde Gas Hong Kong Ltd.
Relevant Market:
The case focuses on horizontal concentration in the industrial gas supply sector. Both parties operate in the on-site/pipeline supply market for bulk industrial gases in China. Considering the high substitutability between on-site and pipeline supply modes, SAMR defined the relevant product market as the on-site/pipeline supply of bulk industrial gases in China.
Competition Analysis:
Market share calculations based on the past five years of tendered projects indicated a combined share of 25–35%. The pre-transaction HHI ranged from 1000–1500 and post-transaction HHI from 1500–2000, with ΔHHI of 300–500. Although the concentration suggested potential unilateral effects, further analysis showed that:
1) The combined entity would still face effective competition from other suppliers.2) The two parties were not close competitors, with limited overlap in tenders.3) Strong buyer power exists, as downstream industrial clients could switch to alternative suppliers or self-supply.
Significance:
This case highlights how SAMR evaluates horizontal concentrations in tender-based markets. Key considerations include competitor numbers and trends, competitive constraints, closeness of competition, and buyer power. Detailed evidence such as historical bidding and client contracts informed the assessment, ultimately concluding no exclusionary or restrictive effects.
Case 2: Gaoji Pharmaceutical Co., Ltd. Acquires Tianji Pharmacy Chain Co., Ltd. and Two Other Companies
Case Overview:
Acquirer: Gaoji Pharmaceutical Co., Ltd.Targets: Tianji Pharmacy Chain Co., Ltd. and two other companies
The acquirer planned to acquire 51% of the targets’ equity. Previously, the targets were under joint control by their original shareholders. After the transaction, Gaoji would have sole control.
Relevant Market:
The parties’ activities span drug wholesale, pharmacy retail, and online drug retail, creating both horizontal and vertical overlaps. The relevant markets were defined as drug wholesale, pharmacy retail, and online drug retail, with geographic scopes ranging from nationwide (wholesale, online retail) to specific cities (pharmacy retail).
Competition Analysis:
Drug Wholesale Market: Low combined market share (0–5%), indicating no market power. Online Drug Retail Market: Combined share 10–15%; no market control. Pharmacy Retail Market: Shares varied by city; even where the share was higher (40–45% in Xiangyang), entry barriers were low and competition from other channels existed. Vertical Analysis: Across upstream and downstream markets, the transaction did not enable raw material or customer foreclosure due to low combined shares, entry feasibility, and strong upstream competition.
Significance:
The case demonstrates that high downstream market shares in vertical concentrations do not automatically indicate anti-competitive effects. SAMR considers market structure, entry conditions, and vertical relationships comprehensively to assess potential impacts.
Case 3: Ouyeel Chain Recycling Co., Ltd. Acquires Hebei Green New Materials Co., Ltd.
Case Overview:
Acquirer: Ouyeel Chain Recycling Co., Ltd.Target: Hebei Green New Materials Co., Ltd.Existing Shareholder: Handan Steel-affiliated Enterprises
The acquirer aimed to acquire 51% of the target’s equity. Pre-transaction, the target was solely controlled by the existing shareholder; post-transaction, control would be shared.
Relevant Market:
The case involves both horizontal and vertical overlaps in recycled steel materials and crude steel markets. The relevant markets were defined as recycled steel raw materials and crude steel in China.
Competition Analysis:
Recycled Steel Market: Combined market share 15–20%, post-transaction HHI <1000. Crude Steel Market: Combined share 15–20%, post-transaction HHI <1000.
Low market shares and low HHI levels indicate minimal concentration effects. Other competitors maintain sufficient capacity to constrain the combined entity. Vertical analysis confirms that the transaction does not enable raw material or customer foreclosure.
Significance:
This case illustrates SAMR’s approach to low-concentration horizontal and vertical mergers. When market shares and concentration indices are low, exclusionary or restrictive effects are unlikely, and further consideration of entry barriers or buyer power is generally unnecessary.
Comment
The publication of these three typical cases provides clear guidance on SAMR’s anti-monopoly assessment methodology for mergers and acquisitions. By highlighting factors such as market definition, competitive constraints, and vertical relationships, SAMR enhances predictability and transparency in the regulatory environment, assisting enterprises in planning compliant and efficient transactions.
The selected cases cover a variety of industries and transaction types, such as horizontal concentration in the industrial gas sector and vertical concentration in the pharmaceutical retail sector. By highlighting these cases, SAMR seeks to improve the efficiency and quality of filings and foster a predictable and transparent regulatory environment for investment and M&A activities.
The cases presented are not full reproductions of the underlying facts but focus on key points of concern and competitive analysis approaches used by anti-monopoly authorities, including procedural considerations, control change assessment, relevant market definition, horizontal and vertical relationships, market share and concentration estimations, evaluation of unilateral, coordinated, and foreclosure effects, and review of supporting evidence.
Case 1: Hangzhou State-owned Capital Investment & Operation Co., Ltd. Acquires Zhejiang Yingde Holdings Group Co., Ltd.
Case Overview:
Acquirer: Hangzhou State-owned Capital Investment & Operation Co., Ltd.Target: Zhejiang Yingde Holdings Group Co., Ltd.Existing Shareholder: Yingde Gas Hong Kong Ltd.
The acquirer intended to acquire part of the target’s equity. Before the transaction, Yingde Gas Hong Kong Ltd. had sole control over Zhejiang Yingde Holdings Group Co., Ltd. After the transaction, control would be shared between Hangzhou State-owned Capital Investment & Operation Co., Ltd. and Yingde Gas Hong Kong Ltd.
Relevant Market:
The case focuses on horizontal concentration in the industrial gas supply sector. Both parties operate in the on-site/pipeline supply market for bulk industrial gases in China. Considering the high substitutability between on-site and pipeline supply modes, SAMR defined the relevant product market as the on-site/pipeline supply of bulk industrial gases in China.
Competition Analysis:
Market share calculations based on the past five years of tendered projects indicated a combined share of 25–35%. The pre-transaction HHI ranged from 1000–1500 and post-transaction HHI from 1500–2000, with ΔHHI of 300–500. Although the concentration suggested potential unilateral effects, further analysis showed that:
1) The combined entity would still face effective competition from other suppliers.2) The two parties were not close competitors, with limited overlap in tenders.3) Strong buyer power exists, as downstream industrial clients could switch to alternative suppliers or self-supply.
Significance:
This case highlights how SAMR evaluates horizontal concentrations in tender-based markets. Key considerations include competitor numbers and trends, competitive constraints, closeness of competition, and buyer power. Detailed evidence such as historical bidding and client contracts informed the assessment, ultimately concluding no exclusionary or restrictive effects.
Case 2: Gaoji Pharmaceutical Co., Ltd. Acquires Tianji Pharmacy Chain Co., Ltd. and Two Other Companies
Case Overview:
Acquirer: Gaoji Pharmaceutical Co., Ltd.Targets: Tianji Pharmacy Chain Co., Ltd. and two other companies
The acquirer planned to acquire 51% of the targets’ equity. Previously, the targets were under joint control by their original shareholders. After the transaction, Gaoji would have sole control.
Relevant Market:
The parties’ activities span drug wholesale, pharmacy retail, and online drug retail, creating both horizontal and vertical overlaps. The relevant markets were defined as drug wholesale, pharmacy retail, and online drug retail, with geographic scopes ranging from nationwide (wholesale, online retail) to specific cities (pharmacy retail).
Competition Analysis:
Drug Wholesale Market: Low combined market share (0–5%), indicating no market power. Online Drug Retail Market: Combined share 10–15%; no market control. Pharmacy Retail Market: Shares varied by city; even where the share was higher (40–45% in Xiangyang), entry barriers were low and competition from other channels existed. Vertical Analysis: Across upstream and downstream markets, the transaction did not enable raw material or customer foreclosure due to low combined shares, entry feasibility, and strong upstream competition.
Significance:
The case demonstrates that high downstream market shares in vertical concentrations do not automatically indicate anti-competitive effects. SAMR considers market structure, entry conditions, and vertical relationships comprehensively to assess potential impacts.
Case 3: Ouyeel Chain Recycling Co., Ltd. Acquires Hebei Green New Materials Co., Ltd.
Case Overview:
Acquirer: Ouyeel Chain Recycling Co., Ltd.Target: Hebei Green New Materials Co., Ltd.Existing Shareholder: Handan Steel-affiliated Enterprises
The acquirer aimed to acquire 51% of the target’s equity. Pre-transaction, the target was solely controlled by the existing shareholder; post-transaction, control would be shared.
Relevant Market:
The case involves both horizontal and vertical overlaps in recycled steel materials and crude steel markets. The relevant markets were defined as recycled steel raw materials and crude steel in China.
Competition Analysis:
Recycled Steel Market: Combined market share 15–20%, post-transaction HHI <1000. Crude Steel Market: Combined share 15–20%, post-transaction HHI <1000.
Low market shares and low HHI levels indicate minimal concentration effects. Other competitors maintain sufficient capacity to constrain the combined entity. Vertical analysis confirms that the transaction does not enable raw material or customer foreclosure.
Significance:
This case illustrates SAMR’s approach to low-concentration horizontal and vertical mergers. When market shares and concentration indices are low, exclusionary or restrictive effects are unlikely, and further consideration of entry barriers or buyer power is generally unnecessary.
Comment
The publication of these three typical cases provides clear guidance on SAMR’s anti-monopoly assessment methodology for mergers and acquisitions. By highlighting factors such as market definition, competitive constraints, and vertical relationships, SAMR enhances predictability and transparency in the regulatory environment, assisting enterprises in planning compliant and efficient transactions.