ACCC expects 80pc of mergers to be cleared within 20 days under for purpose tools overhaul
The competition regulator says an overhaul of Australia’s merger settings will provide fit for purpose tools that will drive down approval times and offer greater transparency to businesses.
Business
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The Australian Competition & Consumer Commission expects about 80 per cent of mergers will be cleared within 20 business days after a shake-up of the country’s merger regime under new legislation introduced by Jim Chalmers.
The regulator says the overhaul will provide fit-for-purpose tools for identifying and preventing anti-competitive mergers while imposing new obligations on the ACCC to make decisions within legislated time frames.
Introduced to parliament on Thursday by the Treasurer, the legislation has been welcomed by business.
It will require the ACCC to vet planned mergers and acquisitions above certain monetary thresholds. This has been changed from an initial proposal in April, when he proposed “market share thresholds” amid concerns that anti-competitive mergers were pushing up prices for consumers.
ACCC chair Gina Cass-Gottlieb said the legislation marked a major change for corporate deal making, with Australia to move from a judicial enforcement model to a primarily administrative regime, with the regulator the first-instance decision maker on each notified acquisition.
“This marks a significant milestone in the process of reforming Australia’s merger laws,” she said.
“The ACCC is committed to the successful implementation of these reforms, if passed by parliament, to ensure that transactions that may adversely affect competition are subject to adequate scrutiny based on the risks raised, and to provide a more efficient and transparent process for businesses and for the wider community.”
Business Council chief executive Bran Black has backed the legislation as a step in the right direction after he previously said earlier proposals risked stifling investment, diminishing competition and limiting deal-making activity.
“The legislation now presents the opportunity to achieve greater certainty, more simplicity and increased timeliness for merger proponents,” he said
“The BCA strongly advocated for measures, which have now been included in the design, including retaining the ability to progress mergers with net public benefits, ensuring stop-the-clock and restart-the-clock provisions don’t bog down economic activity, and having clear transitional provisions for business.”
Mr Black said timeliness and transparency will be critical to ensuring deals that are good for the Australian economy aren’t impeded by red tape.
Only a small proportion of the estimated 1000-1500 mergers that occur each year are notified to the ACCC, and about 93 per cent of those that are voluntarily notified are assessed on a confidential basis.
“Our statement of goals is the first step in signalling how we will implement these reforms and outlines what merger parties and stakeholders, including customers and suppliers to merger parties, should expect,” Ms Cass-Gottlieb said.
The new system will provide clear notification requirements and more information about the mergers the ACCC is reviewing and the reasons for its decisions. Over time, the regulator says the increased transparency will provide a rich source of data to assess the effectiveness of the new merger control regime.
It will also result in a faster, more efficient process with more certain timelines for businesses seeking clearance.
Under the new regime, the ACCC will take a risk-based approach, with resources prioritised for acquisitions more likely to harm the community.
The ACCC expects about 80 per cent of mergers to be cleared within 15 to 20 business days. A second phase, to be conducted within 90 business days, will involve an in-depth review, while the final 50 business days will consider the public benefit.
The ACCC will receive extra funding to operate the new system, which will include monitoring and surveillance for noncompliance, and an expanded Performance Consultative Committee to advise on the ACCC’s merger review functions.
Subject to the passage of the legislation, the new regime will come into effect from January 1, 2026, but merger parties can start using the new merger regime on a voluntary basis from July 1, 2025.
Mr Chalmers has set three separate monetary thresholds. The ACCC will be required to be notified of any deals where the merger parties have combined Australian turnover of more than $200m annually, and where the target being acquired has domestic turnover above $50m or a global transaction value above $250m. Second, notification will be compulsory when the acquirer has turnover of more than $500m and the target more than $10m, while the third measure is designed to tackle larger companies hoovering up smaller businesses.
Originally published as ACCC expects 80pc of mergers to be cleared within 20 days under for purpose tools overhaul
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