There is no compulsory notification of mergers and acquisitions in Australia. Parties who wish to have their proposed merger or acquisition reviewed by the ACCC are required to request that review from the ACCC. The ACCC does, however, regularly monitor the activity of business and may commence investigations and/or take action in the Federal Court to prevent a merger or acquisition from proceeding, without having first been notified by the merger parties.
The ACCC has power to review mergers where:
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the parties voluntarily submit to the ACCC’s informal merger clearance process (which has no statutory basis); or
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the parties voluntarily submit to the ACCC’s formal merger clearance process, pursuant to ss 95AC to 95AS of the CCA.
The informal merger clearance process is almost routinely adopted where parties consider that the ACCC will be interested in its proposed merger. The process is subject to Informal Merger Review Process Guidelines published by the ACCC. The process is generally as follows:
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One or both of the proposed merger parties notifies the ACCC of the proposed merger (frequently on a confidential basis) and provides the ACCC with a submission which addresses each of the merger factors and sets out the reasons why the ACCC should not oppose the merger.
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The ACCC conducts an internal investigation and, if satisfied that the proposed merger is unlikely to give rise to a substantial lessening of competition in any market, will notify the parties that it does not intend to oppose the merger based on the information it has at that time.
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If the ACCC considers it necessary and with the consent of the merger parties and any necessary waiver of confidentiality, the ACCC will undertake market inquiries as to the impact of the proposed merger on competition.
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If the ACCC is satisfied following the completion of merger enquires that the proposed merger is unlikely to result in a substantial lessening of competition it will issue a non opposition letter to the parties and publicly state that it will not be opposing the merger.
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If upon completion of the first round of market enquiries the ACCC determines that there are certain issues which may give rise to a substantial lessening of competition it will issue a Statement of Issues identifying those issues and inviting the parties and interested members of the public to comment.
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If following the issue of a statement of issues the ACCC receives further information and/or conducts further market enquiries, it will move to a final decision which may be to issue a no opposition letter or alternatively to inform the parties that it will oppose the merger and publish its reasons in the form of a public completion assessment for doing so.
At any point along the chain, merger parties may negotiate with the ACCC to address any potential anti-competitive issues. If such negotiations result in agreement, they will be reduced to the form of a court enforceable undertaking by the merger parties pursuant to s 87B of the CCA. Generally such undertakings are only accepted where they involve structural matters eg the sale of particular aspects of a business, but not behavioural matters such as a promise not to increase prices.
In making its determination under the informal merger clearance process (or the formal merger clearance process) the ACCC is not empowered to consider whether any anti-competitive effect of the merger is outweighed by public benefits which may arise from it.
The public benefits test is available where a party makes an authorisation application in respect of the merger.
In practice, where mergers are effected globally, the ACCC will, with the consent of the parties, liaise with and exchange information with other regulatory bodies in other jurisdictions.
See ACCC clearance.