Impact of mergers
When a business buys another business or its assets, it can become more efficient and innovative. This can result in benefits for consumers and the Australian economy.
However, mergers can also impact the level of competition that remains in a market. In many cases, this impact will be minimal. But some mergers can substantially lessen competition by reducing the number of competitors and changing the way the remaining competitors behave.
When competition is reduced, consumers can face:
- higher prices
- reduced product or service quality
- less choice and innovation.
The Competition and Consumer Act 2010 prohibits mergers which are likely to substantially lessen competition in any market.
Notifying the ACCC of a proposed merger
It isn’t mandatory for businesses to notify the ACCC of a proposed merger. However, going ahead without getting the ACCC’s view on a proposed merger risks an ACCC investigation and potential legal action. This may either delay or prevent the merger transaction.
We encourage merger parties to contact us as early as possible when a merger is being considered that may raise competition issues, and well before it is completed.
Merger parties should be aware that some actions they take while anticipating a merger can expose them to legal action for ‘gun jumping’. This is when merger parties start to coordinate their activities or behave as one entity instead of as competitors during the period before the merger is completed. See Gun jumping risks for merger transactions.
Two ways to have a merger reviewed
Merger parties have 2 ways to seek the ACCC’s view on a proposed merger.
- Informal merger review - an informal process where we provide our view on whether a merger is likely to substantially lessen competition. As it is an informal process, the timelines and procedure for the review are not set out in the law and businesses do not receive an exemption from legal action.
- Merger authorisation - a formal administrative process with mandated timeframes and transparency requirements. This process gives businesses protection from legal action for the merger. The ACCC applies a different test than in the informal review process. We may only grant authorisation if we are satisfied that the merger would not be likely to substantially lessen competition or that the merger would be likely to result in a net benefit to the public.
Merger registers
We keep registers of mergers that are subject to a public informal merger review or a merger authorisation. These registers are published on our website.
See:
The registers include information such as the:
- start date of the review
- indicative timelines for our decision
- key issues we are seeking feedback on from interested parties
- the outcome, and in the case of merger authorisation, written reasons for our decision.
Contact us to discuss a proposed merger
We encourage merger parties to contact the ACCC as early as possible when a merger is being considered and it potentially raises competition issues. We can discuss possible competition issues and review options.
This may be done on a confidential basis.
Contact us by:
