Proceed With Caution China adopts security review system for foreign mergers and acquisitions of dom

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China's Ministry of Commerce (MOFCOM) recently gave Nestle the nod of approval for the international food giant's acquisition of Yinlu Food Group.A signing ceremony was held on September 8 in Xiamen,southeast China's Fujian Province,where Yinlu is headquartered.This is the first merger and acquisition (M&A) case of a domestic enterprise by a foreign investor since the Provisions on the Safety Review System for M&As of Domestic Enterprises by Foreign Investors came into effect on September 1,2011.Nestle,the largest food and nutrition company in the world,has been accelerating its development in the Chinese market in recent years.On April 18,2011,it announced plans to purchase a 60-percent stake in Yinlu,a family-owned food maker with sales of 5.46billion yuan ($854 million) in 2010.The deal was submitted to MOFCOM's for anti-monopoly review on May 24 and was approved after a three-month review period.In July,the food conglomerate said it would buy a 60-percent stake in leading Chinese confectioner Hsu Fu Chi International.MOFCOM's approval of the deal is still pending.
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