Tertiary education program

Anti-competitive merger activity

Merger activity (the acquisition of one business by another) allows businesses to combine and achieve economies of scale and also allows for the replacement of ineffective management teams. However, it is illegal for a business to make an acquisition of assets or shares that would have the effect, or be likely to have the effect, of substantially lessening competition in a particular market. As well as facing significant penalties, a business that engages in anti-competitive merger activity can be ordered to divest the business or assets it has acquired. In other words, it can be made to undo the merger.