CSRC Introduces Multiple Measures to Boost M&A and Restructuring Deals

On February 5, 2024, the Listed Company Supervision Department of the China Securities Regulatory Commission (CSRC) held a symposium, saying that multiple measures will be taken to boost M&A and restructuring deals and support the implementation of excellent and typical cases.

The specific measures include increasing the tolerance of restructuring valuation, supporting parties to a transaction in setting the transaction price rationally on the basis of a market-oriented negotiation, requiring performance commitments to be made for restructuring with major shareholders’ capital injection based on future earnings expectations and similar assessment methods, and allowing parties to other types of restructuring deals to negotiate on whether to agree on the performance commitments; studying the feasibility of implementing a “fast review” on the reorganization of top companies with large market capitalization, and supporting leading enterprises in a sector in acquiring high-quality assets; supporting companies listed on the ChiNext Board and STAR Market in merging and acquiring high-quality targets in the same industry or in the upstream and downstream chain with synergistic effects in terms of the main business; and supporting listed companies (including those that are not under the same control) in merging with each other. The CSRC also calls for investigating and punishing financial frauds and other illegal acts found in restructuring deals, and cracking down on "shell company" speculation and other chaos.