Investment bankers, lawyers welcome speedier M&A processes under Jim Chalmers’ reforms

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Iron-clad timelines, and ensuring that some transactions are scrutinised by the ACCC, provides greater certainty for bankers negotiating billion-dollar deals.

Already a subscriber?Bankers and lawyers expect the proposed merger reforms to answer two burning questions that stifle dealmakers: do transactors need to go to the regulator and, if so, how long until a deal crosses the finish line?, acquisitions above a certain monetary and market share threshold must be reported to the Australian Competition and Consumer Commission, which will then review the deal in 15 or 30 days.

Treasury expected the ACCC would review fewer mergers – it is predicted the annual average will drop from 330 to about 300 – but those it does scrutinise will be far more significant to the economy. So-called “creeping acquisitions” were also addressed in the proposal by Treasurer Jim Chalmers. This aimed to stop companies from gradually buying up outfits in deals that fall below the mandatory notification thresholds, but add to a concentration of market power.

“If the ACCC does not reach a view within a certain time frame , then is deemed clearance,” she said.Before presenting an agreed transaction to the ACCC, however, bankers and lawyers will have more work to do because once the thresholds have been set, more transactions will have to pass through mandatory ACCC review.

 

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