Mergers and acquisitions can be important, both for the growth of your business and the overall functioning of the economy. But do you need to seek regulatory approval before your deal is finalised? 

Parties to a proposed merger are not legally required to notify the Australian Competition and Consumer Commission (ACCC) and may choose to proceed with the merger without seeking any regulatory consideration. 

However, the ACCC may still investigate the merger in the future, including making public inquiries to assist its investigation and, if necessary, taking legal action.

If your merger will have the effect of substantially lessening competition in a market, it is prohibited by the Australian Competition and Consumer Act.

It is therefore in the interest of merger parties to approach the ACCC and discuss possible competition issues and options for having the matter considered. This may be done on a confidential basis.

Merger parties may have a proposed acquisition considered and assessed by the ACCC on competition grounds via either an informal merger review or they may seek a merger authorisation. The informal merger review process enables merger parties to seek the ACCC’s view on whether the proposed acquisition is likely to have the effect of substantially lessening competition. There is no legislation underpinning the informal process; rather it has developed over time to provide an avenue for merger parties to seek the ACCC’s view prior to completion of a merger. It’s important to note and an informal review will not provide merger parties with protection from legal action by the ACCC or other parties.

If you wish to seek statutory protection from legal action for your merger under the Competition and Consumer Act, you need to lodge an application for merger authorisation before proceeding. Fees will apply.

While the merger authorisation is in force, the authorised parties will be able to acquire the relevant shares or assets without risk of the ACCC or third parties taking legal action for a contravention of the Act.

The ACCC will grant authorisation only once it is satisfied that either the proposed acquisition would not be likely to substantially lessen competition or the likely public benefit from the proposed acquisition outweighs the likely public detriment, including any lessening of competition.

Merger authorisation cannot be granted to acquisitions that have been completed.

Find more information on the processes at the ACCC website.