一家大型海外工程机械公司希望能了解国内矿用机械行业内并购的情况，通过向我们提交研究请求，我们的研究支持中心向他们提供了初步研究报告，之后专家/分析员团队对客户所关心的重点问题进行了深入的研究分析。以下是初步研究报告节选：

Memo - Preliminary Research Report

This is with respect to your research interest on mining equipment M&A.

• On regulations
  Summary
  There is no specific regulations on M&A of mining equipment industry released in the past year. However, there are some relevant regulations which may have impact in foreign investments into mining equipment industry in China. (listed below in the Abstract of Regulations)
  Any M&A of domestic company by foreign investors touches certain bottom lines will trigger an antitrust review (for details, please refer to the M&A Rules below).
  Equipment manufacturing has been identified as one of the Key Industries, in which key domestic players should be state-owned.

Abstract of Regulations

- The Enforcement Regulations for Speeding up Vitalizing Machine Building Industry Issued by the State Council - Feb. 2006
Identified 16 missions, including "Develop large scale integrate underground coal mining, lifting, and washing equipment, and large scale open pit mining equipment. Those equipment should be domestically produced as the mission."
Any transfer of the control of the key manufacturers of equipment to foreign entity/capital should get approval from the State Council.

- Provision on Takeover of Domestic Enterprises by Foreign Investors (the "M&A Rules") - Sep. 2006
The regulation transparencies and standardizes the process and policy on foreign investors M&A domestic companies.
The regulation also lists the bottom lines of antitrust review

Chapter V Antitrust Review
Article 51 If the takeover of a domestic company by a foreign investor is under any of the following circumstances, the investor shall report the relevant information to the MOFCOM and the State Administration for Industry and Commerce (hereinafter referred to as the SAIC):
(1)The current-year business volume of any party to the takeover in the Chinese market exceeds RMB 1.5 billion yuan;
(2)The foreign investor has accumulatively taken over more than 10 enterprises in the domestic relevant industries;
(3)The market share of any party to the takeover has reached 20% in China; and
(4)The takeover leads to the fact that the market share of the party to the takeover has reached 25% in China.

When the foreign investor fails to meet the conditions as mentioned in the preceding Paragraph, but upon request of a domestic enterprise of competitive relationship, a relevant functional department or industrial association, the MOFCOM or the SAIC believes that the takeover by the foreign investor involves a huge market share, or that there are other major factors which seriously impact market competition, it may also demand the foreign investor to prepare a report.

The aforesaid merging party includes the connected enterprises of the foreign investor.

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• MNC engagements in China Mining equipment

- Aug 1, 2007, Xinjiang Coal Mining Machinery Ltd. started construction. Xinjiang Coal Mining Machinery is a JV of IMM (International Mining Machinery) and Shenhua Xinjiang Development Co. with total investment of RMB 500 mln. (IMM takes 51% of total share, according to some press). The JV will develop and produce conveyer, drilling machine, scraper conveyor, mine car, and crusher, and will provide maintain and leasing service.

- Sept 12, 2006, Taiyuan Mining Machinery Group Co., Ltd and Hydra Tools International Inc. signed an agreement on establishing the Taikuang-Hydra Co., Ltd. Located at the Taiyuan Economic Development Area, the joint venture will produce drum coalcutters. And, in Apr 2007, the JV confirmed to be invested by Hydra with RMB 9 mln (Hydra will take 70% of the total share), and Taiyuan Mining Machinery with RMB 3.86 mln (Taiyuan takes 30%).

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