Mergers and acquisitions can be important for the efficient functioning of the economy. However, the Competition and Consumer Act prohibits those mergers that would have the effect, or be likely to have the effect, of substantially lessening competition in a market.
Merger parties are not legally required to notify the ACCC of a merger and have the option of proceeding with the merger without seeking any regulatory consideration. However, this will not prevent the ACCC from subsequently investigating the merger, including making public inquiries to assist its investigation and, if necessary, taking legal action.
Merger parties are therefore encouraged to approach the ACCC as soon as there is a real likelihood that a proposed acquisition may proceed, to discuss possible competition issues and options for having the matter considered. This may be done on a confidential basis.
Merger parties have two avenues available to have a proposed acquisition considered and assessed by the ACCC on competition grounds:
The informal merger review process enables merger parties to seek the ACCC’s view on whether the proposed acquisition is likely to have the effect of substantially lessening competition. There is no legislation underpinning the informal process; rather it has developed over time to provide an avenue for merger parties to seek the ACCC’s view prior to completion of a merger.
An informal view by the ACCC not to oppose a merger does not provide the merger parties with protection from legal action by the ACCC or other parties.
Merger parties may seek statutory protection from legal action under section 50 of the Competition and Consumer Act 2010 by lodging an application for merger authorisation.
While the merger authorisation is in force, the authorised parties will be able to acquire the relevant shares or assets without risk of the ACCC or third parties taking legal action for a contravention of section 50 of the Act.
The ACCC may not grant authorisation unless it is satisfied that either:
- the proposed acquisition would not be likely to substantially lessen competition or
- the likely public benefit from the proposed acquisition outweighs the likely public detriment, including any lessening of competition.
Merger authorisation cannot be granted to acquisitions that have been completed.
See: Merger authorisation
Merger parties are encouraged to approach the ACCC as soon as there is a real likelihood that a proposed merger may proceed, to discuss possible competition issues and options for having the matter considered. This may be done on a confidential basis.
The Executive General Manager
Mergers, Exemptions and Digital
Australian Competition and Consumer Commission
GPO Box 3131
Canberra ACT 2601
Tel: (02) 6243 1368