BCA Letter to Senate Economics Legislation Committee on Treasury Laws Amendment (Mergers and Acquistions) Bill 2024
31 October 2024
The Business Council of Australia (BCA) welcomes the opportunity to make a submission to the Senate Economics Legislation Committee’s (the Committee) inquiry into the Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill 2024 (the Bill) which provides for a new mandatory and suspensory merger review regime to commence from 1 January 2026 and voluntarily from 1 July 2025.
Mergers play a critical role in Australia’s economy, including enabling businesses to achieve economies of scale that improve innovation and productivity – driving economic growth that benefits consumers and businesses.
The design and execution of the Australian Government’s merger reforms are critically important to all Australians. A well-functioning regime will foster confidence in investing in Australia with appropriate guardrails to prevent the degradation of competition. A poorly functioning regime will lead to a loss of confidence to invest in Australia, increase regulatory and transactional complexity, and limit Australia’s economic growth.
The BCA considers the improved legislation is a useful step in the right direction compared to the original proposal and presents an opportunity to achieve greater certainty, more simplicity and increased timeliness for merger proponents.
The BCA submission expands on the following key improvements from consultation drafts:
- Excluding acquisitions where the acquirer does not obtain control where the definition of control broadly aligns with the Corporations Act.
- Ministerial determination of classes of acquisitions
- Strengthening the legal standard for competition assessments
- Improved definition of substantially lessening competition
- Reverting to a net public benefit test
- Notification waiver
- Improvements to ACCC discretion to “stop the clock” and “restart the clock” during determinations
- Improved procedural fairness at the Tribunal
- Transitional provisions
The BCA submission also raises the following issues for the Committee’s consideration concerning the Bill realting to:
- Notification thresholds
- Changes to the ordinary course of business exemptions
- Annual reporting on the performance of the merger review system, and
- Further matters
Mergers and acquisitions are an important and integral component of a market-based economy, and the Bill presents the opportunity to achieve greater certainty, more simplicity and increased timeliness for merger proponents.
These changes provide for significant national reforms that must ultimately be delivered by the regulator where the proof will be in the pudding of its implementation.