The tougher merger rules announced by Jim Chalmers hands more power to economists and regulators worried about industry concentration, and offers a narrower path for companies and deal makers to get mergers over the line.
Australia is not alone – economists and regulators in the United States and Europe believe the same. Economist Geert Noels, author of, suggests cheap money from central banks has also contributed, by pumping up the share prices of big companies and making it easier to carry out equity and debt funded takeovers of smaller rivals.
Cass-Gottlieb is a former top corporate lawyer and Sydney University medalist in economics, who won many legal battles for merging corporates against the watchdog.Simon Muys, competition partner at Gilbert + Tobin which acts for big companies against the ACCC, says the government’s announced changes go further than addressing creeping acquisitions.
It’s a win for economists and regulators, and a loss for deal lawyers, investment bankers and other deal seekers. This concession from Chalmers recognises that mergers are not necessarily bad and can often be good, so drowning them in red tape could be counterproductive.