The Business Council of Australia (BCA) appreciates Treasury’s swift and responsive engagement throughout this short consultation process on key refinements proposed to the draft Competition and Consumer (notification of Acquisitions) Amendment (2025 Measures No. 1) Determination 2025. We thank Treasury for providing stakeholders with the opportunity to comment on the proposed changes and for the continued constructive dialogue on the development of the new merger notification regime.
We welcome the further amendments proposed and look forward to the finalisation of the measures proposed for financial markets. From the BCA’s perspective, we limit our comments to the below specific issues:
- Ambiguity remains around the concept of “ordinary course of business”
- While we welcome the additional exemptions for property transactions undertaken in the “ordinary course of business”, the practical application of this concept remains unclear.
- Given the broad conception of “asset,” in the merger regime, which captures every transaction a business enters into, it is essential that the Government clearly define what is meant to avoid over capture and be a drag on business investment.
- We recommend that the Explanatory Statement provide clear guidance on circumstances when a transaction will and will not be considered in the ordinary course of business. Clarity will ensure consistent interpretation and avoid unnecessary notifications or engagements with the ACCC, and avoid incurring potential legal expenses, particularly in situations which are, more than likely, to not negatively affect competition.
- New transaction value thresholds may capture deals not intended under the revenue attribution test
- The BCA supports the shift to a transaction value test and acknowledges it is an improvement on the previous revenue attribution approach. However, we are concerned that some of the newly established thresholds could require notification of transactions that would not have been captured previously, including cases where global transactions have incidental Australian operations and/or assets.
- Attribution of revenue to assets
- In each of clauses 1-9(1)(e), 1-10(1)(e), 1-10(2)(e) and 1-14(1)(c) amendments have been made so that the acquisition of the asset is limited to situations where the acquisition has the effect that a person will, or can, acquire all, or substantially all, of the assets of a business. In those circumstances it might be appropriate that the relevant revenue be the Australian revenue attributable to the relevant business rather than the asset.
- Temporal element of control
- Clause 1-11(3)(a) refers to whether a person “has begun or can begin to control,” but it is unclear what this phrasing is intended to capture. Using the simpler term “controls” could provide greater clarity and appears sufficient to address the underlying policy objective.
- Sale and leaseback transaction clarifications
- The terms of Section 2-20(6) regarding sale and leaseback arrangements lacks some clarity in application to common sale and leaseback structures.
- In our view, a simple amendment to section 2-20(6) would resolve issues with connected entities by clarifying that the provision includes leasebacks by a connected entity of the entity that sold the legal/equitable interest in land.