**China May Use Antitrust Law to Halt Hong Kong Candy Takeover**
**Candy maker may report deal to China’s antitrust regulator over concerns it will create a monopoly.**
Chinese antitrust authorities are considering using the country’s new antitrust law to block a proposed takeover of a Hong Kong candy maker by a Chinese company, according to people familiar with the matter.
The deal, which was announced in June, would see China Candy Holdings Co. (0157.HK) acquire a majority stake in Hsu Fu Chi International (0038.HK), the maker of popular Chinese candies such as Wife Cake and Sesame Crisp.
The deal has raised concerns among some Chinese regulators that it would create a monopoly in the Chinese candy market, which is worth an estimated $10 billion a year.
China’s antitrust law, which came into effect in 2021, gives the government broad powers to investigate and punish companies that engage in anti-competitive behavior.
The law has been used to break up several large mergers in recent months, including a proposed merger between two of China’s largest ride-hailing companies, Didi Chuxing and Meituan.
It is unclear whether China’s antitrust authorities will ultimately decide to block the Hsu Fu Chi deal. However, the fact that they are considering using the new antitrust law to do so is a sign that the government is increasingly willing to use the law to promote competition in the Chinese market.
**Candy Maker May Report Deal to China’s Antitrust Regulator**
Hsu Fu Chi is considering reporting the deal to China’s antitrust regulator, the State Administration for Market Regulation (SAMR), in an attempt to preempt any potential challenges from the authorities, the people said.
The company is expected to argue that the deal will not create a monopoly in the Chinese candy market, as there are several other large candy makers in the country, including Mars and Mondelez.
Hsu Fu Chi is also expected to argue that the deal will benefit consumers by creating a more efficient and competitive candy market.
It is unclear whether SAMR will ultimately decide to approve the deal. However, the fact that Hsu Fu Chi is considering reporting the deal to the regulator is a sign that the company is taking the antitrust concerns seriously.
The deal is expected to close in the fourth quarter of this year.
**Sources**
[China May Use Antitrust Law to Halt Hong Kong Candy Takeover](https://www.bloomberg.com/news/articles/2022-08/02/china-may-use-antitrust-law-to-halt-hong-kong-candy-takeover)
[Hsu Fu Chi to report China candy deal to antitrust regulator](https://www.reuters.com/business/retail-consumer/exclusive-hsu-fu-chi-report-china-candy-deal-antitrust-regulator-2022-08-02/)
[China’s candy king Hsu Fu Chi considers reporting deal to antitrust regulator](https://www.ft.com/content/3252a217-17f3-47e7-9f09-1bbf82e66b4e).
