What’s new?
- Over 90 per cent of mergers proceed unopposed: In the September 2007 quarter (1 July – 30 Sept) the ACCC conducted 97 merger reviews. Of these, 86 were not opposed and four were resolved during their review with court enforceable undertakings. Only one was publicly opposed outright.
- ‘Fix it first’ works: Proactive, creative solutions to address competition concerns will be welcomed by the ACCC. A sale to an upfront buyer prior to completion can remedy competition concerns and avoid the need for rigorous hold separate obligations.
- Informal clearance remains the preferred route: The new formal procedure for merger clearances introduced in January 2007 has not been used by any notifying parties to date. This is due at least in part to the confidence that has developed with the ACCC’s informal clearance process.
- New look post acquisition divestments: Where an upfront arrangement is not possible, and a divestment is required, the ACCC will require strict hold separate obligations, including independent managers of divestment assets, auditors to monitor compliance and a fire sale at any price by an independent agent.
- Applied learnings: The ACCC is taking its experience on enforcement and applying it to negotiations during the clearance process. A new ‘undertakings monitoring unit’ has been established for this purpose at the mergers division of the ACCC.
- Economic analysis: Some industries have data which enable rigorous and generally persuasive econometric analysis data (eg rich scan data from retail sales of consumer goods). The ACCC wants this sort of evidence when assessing mergers in these industries.
- Market analysis: Expect the ACCC to analyse the merger on a number of different views of the market, including on the basis of the narrowest possible markets. On some recent occasions the ACCC has required undertakings to address concerns on particularly narrow geographic and product markets.
- ACCC merger guidelines: are being reviewed internally. A consultation draft of the guidelines is expected in the coming months. Expect major changes in emphasis and approaches to merger analysis. In particular, we expect the trend away from ‘safe harbour’ market share thresholds to continue.
- Press: Anticipating press comment is important. The content of media comments also needs to be closely controlled.
This article was prepared by Karen Gibbons, Senior Associate, Melbourne, Michael Gray and Donald Robertson, Partners, Sydney.
More information
For information regarding possible implications for your business, contact a member of the Competition & Market Regulation team.