Competition Law

Australian Competition Law and Policy Discussion

Mergers – creeping acquisitions

Posted by Julie Clarke on 16 April 2009

A discussion paper on creeping acquisitions was released by Chris Bowen MP in September last year; submissions closed on 10 October 2008.

Today, for the first time, there has been some indication that the discussion paper has not been forgotten; Chris Bowen, in an interview with Kieren Gilbert on SkyAgenda, stated that

“In the not too distant future I will be releasing some more information about a proposed way forward, and we will again be consulting on that. But we will make no apologies for proceeding resolutely, but cautiously, because this has the potential to be a very important change but we need to make sure we get the balance very clearly right.” [it’s a pity the same approach does not appear to have been adopted for criminal cartel laws … but that’s another issue]

He later said that the Government would deal with the issue this term, that once ‘we put out the proposed way forward there will be a period of consultation’ and that he hopes to ‘have legislation into the Parliament this year’.

In the course of the interview Bowen also stated that:

“Other countries have divestiture powers, which the ACCC doesn’t have, we have taken the view that we should go down the creeping acquisitions route.”

Of course, Australia does have divestiture powers – the ACCC does not have them directly (nor do most regulators), but may apply to the Court for a divestiture order under s 81(1) of the Act.  It also regularly administers enforceable undertakings (often at the ACCC’s instigation) which may include divestiture obligations – it is currently considering one such proposal for Baiada Poultry.  Divestiture is, arguably, a more important remedy in Australia than other jurisdictions given that there is no compulsory notification regime in Australia to ensure that all potentially anti-competitive mergers are vetted before consummation.  In any event, it is not clear why creeping acquisition laws should be viewed as an ‘alternative ‘ to divestiture.  Hopefully the report will enlighten us further …

2 Responses to “Mergers – creeping acquisitions”

  1. Apostille said

    Good blog.. and an insightful post.. Willl be back to read more

  2. Apostille said

    This is an insightful post. Interesting blog u have here..

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