The Australian Competition and Consumer Commission (ACCC) has proposed radical changes to the way mergers are regulated in Australia recommending the introduction of a mandatory and suspensory merger review process with limited merits review by the Australian Competition Tribunal.
We have three key takeaways:
- compared to the current process, parties will be required to meet a substantially higher standard to obtain merger clearance with some mergers being ‘deemed’ to substantially lessen competition – which will likely lead to pro-competitive and efficiency enhancing deals being blocked;
- the proposed reforms will significantly reduce oversight of ACCC decision making; and
- the proposed reforms create a highly restrictive investment environment that is out of step with global standards – particularly for digital platforms.
At this stage, these are reform proposals only. There is no draft legislation or implementation timeline proposed. However, if these reforms are implemented, many transactions that are lawful under the current regime would face significant and potentially fatal challenges in the future.
See here for the full briefing.