1. On July 15, 2005, Hunan Valin Pipeline Co., Ltd.?000932.SZ, hereinafter referred to as Valin Pipeline, issued an announcement stating that the company received approval from the State-owned Assets Supervision and Administration Commission and the National Development and Reform Commission on the transfer of some state-owned shares of Valin Pipeline.

Wang Jun, the company's deputy general manager and secretary of the board of directors, told reporters that the joint venture will be established in late August.

After Valin Group transferred 647 million of its legal person shares in Valin Pipeline to Mittal, the total share capital of Valin Pipeline remained at 1.765 billion shares, of which Valin Group held 660 million state-owned legal person shares?

37.673%, Mittal holds 647 million non-state-owned shares, accounting for 36.673%.

This merger and acquisition case broke the previous record for the amount of foreign capital acquiring China's A-share market. It was also the first foreign capital to acquire a state-owned steel company through equity investment.

According to Wang Jun, the merger and acquisition has experienced many twists and turns.

Mittal originally wanted to hold the same shares as Valin Group, but at the last moment the Reform Commission refused to approve it, saying that the state-owned assets would hold a controlling stake.

After this merger and acquisition, the National Development and Reform Commission immediately issued policies and regulations for the steel industry, which did not allow foreign capital to control steel companies, especially large steel companies.

Prior to this, relevant laws and regulations did not restrict foreign-owned steel companies.

2. Many countries have relatively complete regulatory systems for cross-border mergers and acquisitions, but this work is still in its infancy in China.

In Germany, company law stipulates that in cross-border acquisitions, when a person acquires 25% or more of the shares or voting rights of a German company, he must notify the Federal Cartel Office.

Acquisitions are prohibited when they create or strengthen a controlling market position.

At the end of 2004, Lenovo's acquisition of IBM's PC business was reviewed by the Committee on Foreign Investment in the United States; and in September 2004, when China Minmetals proposed to acquire Noranda Mining Company, Canada was worried about the prospect of acquiring its own natural resource companies and was in the process of acquiring it.

Tougher safeguards are being considered as well as whether to amend the bill to give parliament greater control over the merger process.

Currently, in Canada, any merger agreement worth more than US$200 million must be approved by the Canadian government before it can take effect. 3. In China, cross-border mergers and acquisitions still lack a complete and systematic supervision system.

Over the past two decades of reform and opening up, multinational companies have seized the Chinese market through direct investment or mergers and acquisitions of Chinese companies, and have achieved monopoly or are at the critical point of monopoly in many industries.

However, China lacks the necessary review agencies for foreign mergers and acquisitions.

This phenomenon has attracted great attention from officials and private industry insiders.

While the China Securities Regulatory Commission, the National Development and Reform Commission and other national ministries and commissions are working hard to revise and issue relevant regulations on foreign mergers and acquisitions, a white paper from the private organization All-China Federation of Industry and Commerce Mergers and Acquisitions Association puts forward systematic measures to prevent the impact of global mergers and acquisitions on my country's economic security. The suggestions mainly include: First, step up the implementation of relevant laws and regulations with the Anti-Monopoly Law as the main body.

The white paper believes that the biggest direct negative impact of foreign mergers and acquisitions is that it may lead to monopoly and suppress my country's infant industries, and the most important means to overcome this negative impact is the Anti-Monopoly Law.

The second is to establish a cross-border merger and acquisition approval agency for review. This agency that performs special review tasks can be composed of multiple ministries and commissions and be directly managed by the State Council.

The third is to establish a national economic security early warning mechanism in mergers and acquisitions. The first is information early warning. It is necessary to establish an economic information network, file management system and analysis system for mergers and acquisitions.

Wang Wei, president of the All-China Federation of Industry and Commerce Mergers and Acquisitions Association and chairman of Wanmeng Investment Management Co., Ltd., is the initiator of this white paper. He told reporters that the Mergers and Acquisitions Association hopes to form a platform in the industry to jointly promote the development of this business.

4 Shao Ning, deputy director of the State-owned Assets Supervision and Administration Commission of the State Council of China, pointed out on the 12th that with the expansion of the scale of foreign investment, the impact of foreign investment on China’s economic development cannot be ignored.

Shao Ning said at the "Finance 2007 Annual Conference: Forecast and Strategy" held here that under the condition that domestic and foreign-funded enterprises cannot fully compete on an equal footing, preferential policies for foreign investment are likely to amplify the negative effects of foreign investment.

In this regard, he pointed out that policy adjustments must first be made so that foreign capital enjoys equal national treatment.

Under such a premise, it is possible to more accurately judge and formulate policies on the effects of foreign capital entering and acquiring domestic enterprises.

The equal treatment enjoyed by domestic and foreign-funded enterprises is the benchmark for judging the effects of foreign-funded mergers and acquisitions of Chinese enterprises.

Shao Ning said that with the growth of domestic enterprises and the increase of national foreign exchange reserves, it is an inevitable trend for Chinese enterprises to go abroad to invest and acquire enterprises.

He pointed out that when Chinese enterprises go global, they should first improve their international operation capabilities, including the cultivation and reserve of talents.

We should start from the direction of comparative advantage.

For example, in international project contracting, it is difficult for better domestic manufacturing companies to acquire small and medium-sized manufacturing companies of the same type in developed countries.

He suggested that professional services related to Chinese enterprises going global should be developed, including services for mergers and acquisitions and operations.