The competition review may hasten merger and acquisitions between companies now considering deals, before any law changes.
Company directors, investment bankers and transaction lawyers are on notice that merger and aquisition laws are likely to get tougher and make corporate consolidation harder.
That former ACCC boss Rod Sims and Grattan Institute head Danielle Wood will lead the Treasury review suggests change is coming. Sims, who lost several high-profile court cases against merger parties, has argued the current laws make it too easy for big companies to take over competitors and increase their market dominance.The ACCC found that merger parties often exaggerate claims about benefits and distorted or omitted critical information.
The competition reforms have been driven by Assistant Minister for Treasury, Andrew Leigh, an economist who has been campaigning against monopolies and oligopolies. Nevertheless, these reform considerations need to be complemented by harder headed pro-competition changes that actually increase competitive pressure against monopolies such as in the pharmacy and airline industries.
Former ACCC chairman Graeme Samuel and the Productivity Commission, under commissioner and former ACCC merger review chairman Stephen King, have been more circumspect on tightening merger clearance laws.
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