Mofcom to meet with complainant against McDonald’s sale of China, Hong Kong businesses

24 February 2017. By Xu Yuan.

China's Ministry of Commerce, or Mofcom, will meet with parties that have complained about McDonald's proposed sale of some of its $2.08-billion China and Hong Kong businesses, MLex has learned.

Mofcom will meet with representatives from Hejun Vanguard Group, a Beijing-based consultancy that filed complaints to the ministry against a deal in which McDonald's will sell an 80-percent stake in its mainland China and Hong Kong operations to a group of investors including Chinese state-owned conglomerate Citic, Citic Capital Holdings and US private equity firm the Carlyle Group. The time of the meeting hasn't yet been finalized, it is understood.

The complaints were submitted separately to Mofcom's Antimonopoly Bureau and the Commercial Franchise Supervision Office only last Wednesday, indicating a swift response by Mofcom to criticism over the deal, which also faced opposition in Hong Kong over labor welfare concerns.

The Antimonopoly Bureau, China's merger control agency, is expected to conduct an antitrust review of the deal regardless of the complaints.

Hejun Vanguard was also involved in opposing US beverage company Coca-Cola's failed bid to buy China's Huiyuan Juice in 2008. The company sent a joint letter to Mofcom together with small- and medium-sized enterprises in the juice industry, stressing the negative consequences of the proposed deal.

That deal later became the first transaction to be blocked under China's Antimonopoly Law and one of only two deals that have been blocked in Mofcom's enforcement history. The other rejected deal was a shipping alliance among Moller-Maersk, MSC Mediterranean Shipping Company and CMA CGM.

Hejun Vanguard has also been involved in the past in other disputes, including a joint venture dispute between Wahaha and Danone, the iPad trademark infringement litigation, and a minority shareholder dispute against China Resources, it said.

Li Su, president of Hejun Vanguard, has over 30 years of experience in management consulting and government relations, according to an introduction provided by the company. He has served as deputy director of the Economic Research Institute at the Beijing Academy of Social Sciences, senior researcher for the Asian American Studies Center at the University of Houston, and researcher for the Social Development Center at the Chinese Academy of Social Sciences.