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China Unveils New Measures to Boost M&A, Restructuring

(Bloomberg) -- China’s securities regulator rolled out new guidelines to promote mergers and restructuring among listed companies as part of Beijing’s latest stimulus package to bolster the sagging economy.  

The China Securities Regulatory Commission will actively support deals involving strategic industries and key assets to upgrade toward the “new productive forces,” as President Xi Jinping’s economic shift is known.

In a bid to boost deal efficiency, the CSRC will simplify its approval procedures and shorten the review time for qualified listed companies. The regulator will urge these firms to fund their M&A and restructuring deals in phases, including issuing shares and convertible bonds in batches to enhance flexibility.    

“Mergers, acquisitions and restructuring are important market tools to support economic transformation and achieve high-quality development,” the CSRC said in a statement Tuesday, adding that the new measures are aimed at leveraging capital markets as the main channel for corporate M&A.

China unveiled a broad package of economic measures to boost its stuttering economy in a rare briefing on Tuesday hosted by the People’s Bank of China governor Pan Gongsheng, along with CSRC chief Wu Qing, and Li Yunze, head of the National Financial Regulatory Administration.

CSRC added it will also improve regulatory tolerance for M&A deals based on valuations, performance commitments and competition to achieve better resource allocation. 

The regulator also vowed to strengthen industry consolidation among listed companies, while encouraging private equity funds to actively participate in deals. It also reiterated its plan to strengthen regulatory oversight to maintain market order. 

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