Proposed merger reform will make clearance process more challenging, Allens partner says

She also welcomed the introduction of a waiver power, which will allow for some flexibility that was previously lacking, as well as the addition of the ability for the Australian Competition Tribunal to introduce new evidence if the parties have not had the opportunity to present it before the Australian Competition and Consumer Commission (ACCC). This addition promotes procedural fairness, she said.

“We will need to see how it is implemented in practice,” Downes said of the proposed merger reform.

Possible issues

Downes acknowledged that the planned changes will undoubtedly make the merger clearance process more challenging and will potentially introduce inefficiencies unnecessarily hampering business transactions.

Under the proposed legislation, the merger approval process is still very complex and still likely to capture many transactions, Downes said. The revised test for control, while welcome, will unnecessarily cover a large number of transactions, Downes added.

Apparently, the government has not moved much on the financial thresholds, according to the Treasurer’s statement, Downes noted. The government plans to require notification for all acquisitions of over 20% of a private company by corporations with more than $200m in revenue, Downes also noted.

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