【Text/Observer.com, Deng Jun; Editor/Zhao Qiankun】

According to Reuters, the State Administration for Market Regulation (SAMR) of China (hereinafter referred to as "the SAMR") announced on Tuesday that it has approved the acquisition of shares in Nippon Cargo Airlines (NCA) by ANA Holdings Co., Ltd. (ANA) with restrictive conditions in accordance with the law. This move aims to ensure the smooth operation of bilateral trade, maintain the "main artery" of Sino-Japanese economic and trade relations, and promote the stability of regional industrial chains and supply chains.

As an important economy in East Asia, the economic and trade relationship between China and Japan is closely connected, and air freight is an important link between the two countries. The acquisition involves the integration of two major airlines in the Japanese air cargo market. According to international practices, if the merger of two foreign companies may have an impact on the Chinese market, China has the right to exercise jurisdiction under specific conditions.

The SAMR stated in its statement that the review focused on assessing the potential impact of the transaction on the competitive landscape of air freight services between China and Japan. Upon investigation, it was found that ANA and NCA have a relatively high combined capacity on the China-Japan route, and the transaction could weaken the level of competition in the two-way service market. To ensure fair competition in the market after the transaction, ANA has committed to fulfilling several restrictive conditions, including: continuing to implement existing cargo ground service agreements, not refusing to renew related agreements, providing ground handling services to new market entrants, and transferring some flight schedules. These measures aim to maintain the openness and competitiveness of the China-Japan air freight market and prevent monopolistic risks.

The SAMR emphasized that this conditional approval decision fully considered the needs of maintaining market competition order and protecting consumer interests, reflecting the attention of China's anti-monopoly enforcement agencies to the international air freight market.

ANA first announced its plan to acquire NCA from Nippon Yusen Kabushiki Kaisha in March 2023, originally scheduled to complete the transaction on October 1 of the same year. Due to the need for review by Japanese and Chinese regulatory authorities, the closing date was repeatedly delayed.

According to AircargoNews, a professional media outlet in the air cargo industry, the Japan Fair Trade Commission (JFTC) initially rejected the case, concerned that it would restrict air freight competition from Japan to Chicago and Los Angeles. Reports indicated that in the general cargo market excluding large and hazardous goods, the merged entity of ANA and NCA was expected to capture 30% and 35% of the market share in Los Angeles and Chicago, respectively, becoming the largest air freight service provider in those regions.

To address the concerns of Japanese regulatory authorities, ANA and NCA made concessions - signing a cargo space sharing agreement with their competitor Polar Air Cargo, and appointing independent lawyers and economists to supervise the implementation of the agreement. Based on this, the JFTC assessed that the relevant measures "established an effective counterbalance mechanism to prevent the involved company groups from unilaterally manipulating freight rates."

In January 2025, the JFTC finally approved the acquisition.

Reuters reported that the approval from Chinese regulatory authorities was crucial for ANA to proceed with the acquisition. ANA announced that, after obtaining the approval from the relevant Chinese departments, it will officially complete the acquisition of NCA on August 1 this year.

The SAMR stated that in the next step, it will do a good job in supervising and implementing the case, ensuring that the relevant commitments are effectively fulfilled, continuously maintaining the fair competition order in the China-Japan air freight service market, and promoting the healthy development of the air logistics industry.

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Original text: https://www.toutiao.com/article/7522422439008895503/

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