The Business Council says the Government’s proposed reform to company mergers achieves a balance between economic and regulatory needs, however close consultation will be required to ensure businesses aren’t burdened with unintended consequences.
“Mergers can lead to diversification and efficiencies that benefit consumers, and the ability of businesses to acquire, dispose, restructure and merge forms an integral part of commerce,” BCA Chief Executive Bran Black said.
“The Government has accepted important points advocated by the BCA, including there be no change to the onus in the merger test, clear decision-making timelines and streamlining FIRB competition assessments.
“This is a significant piece of reform, and we are encouraged that the Government has listened to business and taken on our concerns regarding the importance of outcome certainty, timeliness and transparency,” Mr Black said.
“There is still a lot of detail that is to be determined and further consultation will be required with business on many important elements in this package.
“When implementing this reform, we need to ensure Australia’s merger regime doesn’t add further red tape to businesses. For example, the BCA expects to see reasonable and practical thresholds for merger notification.”
The reforms also include stronger provisioning for transparency and procedural fairness in relation to ACCC decision making on proposed acquisitions.
Mr Black said it is also critical that the ACCC be appropriately resourced to transition and deliver the reforms, so investment and acquisitions are not bottle-necked.
The BCA is encouraged to see clear timeframes for ACCC decision making, which include a fast-tracked option for non-contentious matters.
“The average period for the ACCC to process merger authorisations has been 171 days, with the longest being 260 days – a long way from the existing 90-day statutory requirement.
“This time is far too long and so we need clear decision timelines to provide investment certainty, and that means making sure the ACCC is adequately resourced.
“A commitment to reviewing the overall scheme three years following its commencement will also be vital to ensuring it’s operating as intended.”
