Merger Controls First Edition - J Sagar Associates

Australia
Elizabeth Avery & Gina Cass­Gottlieb
Gilbert + Tobin
Overview of merger control activity during the last 12 months
The Australian Competition and Consumer Commission (ACCC) is responsible for administering the Competition and
Consumer Act 2010 (Cth) (CCA), including the prohibition on acquisitions of shares or assets that have the effect, or
would be likely to have the effect, of substantially lessening competition in a market in Australia, under s 50 of the CCA.
Although there is no compulsory pre-clearance regime, in practice a well established informal clearance process has
developed, as the statistics below indicate. The degree of recent merger control activity is best illustrated by comparison
with activity in prior years1 .
2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 2004/05
Total 105 168 412 397 390 272 189
Not opposed 99 131 397 380 365 261 178
Opposed
outright
Resolved
during review
through
undertakings
3 8 10 11 17 5 2
6 4 5 6 8 6 9
As the statistics above highlight, there has been a proportionate increase over prior years in the number of mergers resolved
through undertakings. The number of outright oppositions by the ACCC has also increased in the last few years.
Strategic considerations in relation to decisions as to whether to seek ACCC clearance
As there is no statutory requirement to seek pre-merger clearance under Australian law, parties have several options
available to them, allowing for a relatively high degree of flexibility. The strategy that the parties to a transaction adopt
may depend on the parties’ appetite for risk.
These options include:
• Simply proceeding with the transaction without approaching the ACCC. However, this will not prevent the ACCC
from subsequently investigating the merger, including using its statutory powers to compel the production of
documents, information and testimony under oath, as well as making public inquiries to assist in the ACCC’s
investigation. Nor will proceeding with the transaction prevent the ACCC from taking action to prevent the merger,
or seek divestitures in relation to the merger. In the last year, there have been 16 transactions where the ACCC
reviewed the transaction after completion, and some of these reviews are ongoing.
• Seeking informal clearance from the ACCC. If informal clearance is sought, parties generally provide a detailed
written submission explaining the transaction and why it raises no competition concerns. The ACCC will publish
a timetable for conducting its market enquiries and review process.
• Seeking formal clearance from the ACCC under ss 95AC-95AS of the CCA. If granted, a formal clearance decision
provides the parties with legal protection from court action under s 50 of the CCA. If the ACCC refuses the
application, an appeal to the Australian Competition Tribunal is available. Notably, no applications have yet been
made under the formal clearance process, and the ACCC has indicated its preference for applications under the
informal clearance process.
Global Legal Insights ­ Merger Control First Edition
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