The Australian Competition and Consumer Commission (ACCC) has emphasised the urgent need for reforms to Australia’s merger and acquisition (M&A) laws.
In its second submission to the Treasury Competition Review, the ACCC outlined the necessity of aligning with other developed economies to effectively prevent anti-competitive transactions, especially amidst the current cost-of-living crisis.
The ACCC’s submission to the review has raised significant concerns regarding the effectiveness of Australia’s current merger laws.
The new research reveals that of the estimated 1,000 to 1,500 mergers occurring annually in Australia, only 330 are notified to the ACCC under the voluntary regime.
Approximately half these mergers are conducted by the top 1% of businesses.
To reduce the impact on businesses involved in non-contentious mergers, the ACCC suggests a waiver process for a fast-track 20-business-day exemption from formal notification, ensuring swift assessment for the majority of cases.
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This proposal aims to offer businesses greater certainty about review timeframes and published reasons for decisions.
The ACCC’s proposed reforms include a right of review to the Australian Competition Tribunal, which is currently unavailable under the informal merger clearance regime.
The commission’s analysis indicates that 60% of the most contested transactions occur in markets with three or fewer competitors, heightening the risk of consumer harm.
ACCC chair Gina Cass-Gottlieb said: “The ACCC’s strong view is that the competitiveness of Australian markets is best preserved by moving to a regime where, for the most significant mergers, the merger parties must make their case that their proposed transaction should be cleared. They should be required to produce evidence that satisfies the ACCC that there will be no likely substantial lessening of competition.”
The ACCC was recently tasked by the Albanese government to conduct a comprehensive inquiry into supermarket pricing and competition.