28 January 2026 — China has introduced new M&A Loan Measures effective 31 December 2025, replacing the 2015 framework. The updated rules broaden financing options for acquisitions while strengthening risk controls for banks.
Key changes include:
- Minority acquisitions now eligible for financing, allowing loans for initial purchases of 20%+ equity and additional 5%+ follow‑on acquisitions when the buyer already holds significant ownership or control.
- Lower equity contribution for controlling acquisitions from 40% to 30%, increasing financial flexibility for larger deals. Minority-interest loans retain the 40% requirement.
- Extended loan tenor for controlling-interest M&A loans from 7 to 10 years, offering buyers more room for cash‑flow management.
- Refinancing restrictions now prohibit using M&A loans to repay previous acquisition‑related bank loans, including offshore bridge financing—tightening controls on leverage and debt recycling.
Overall, the new measures improve deal execution flexibility, especially for minority investments, while reinforcing prudential safeguards to reduce financial risk.
Simon Leung, Partner at Baker McKenzie, has co-authored this legal update.