Australia: Merger Control

Key points

Australia’s merger control regime is contained in the Competition and Consumer Act 2010 (Cth) (the Act) and is vigorously administered by the Australian Competition and Consumer Commission (ACCC).

The Act prohibits direct and indirect acquisitions of shares or assets that would be likely to have the effect of substantially lessening competition in a market in Australia or a state, territory or region of Australia.

The Act also applies to offshore acquisitions of shares where the acquisition would result in a change of control of an Australian subsidiary, and the change of control of the Australian subsidiary would be likely to substantially lessen competition in Australia and would not be offset by public benefits.

In the 2009/10 financial year, the ACCC assessed 321 acquisitions. The ACCC conducted market inquiries in 168 of them. It did not oppose 131 (of the 168), opposed eight and accepted undertakings to divest shares or assets in four. It issued summonses to compel the production of information and documents, and to cross examine individuals under oath (usually about the counterfactual scenario or the basis of an objection to an acquisition) in a small number of its assessments.

At the time of writing, the ACCC has applied to the Federal Court of Australia to injunct Metcash from acquiring Franklins (each of which carry on business in the Australian grocery sector). The application is being heard on an expedited basis by a single judge (Emmett J) in the Federal Court of Australia. The case involves three key issues:

• market definition in grocery markets in Australia;
• the counterfactual scenario (including whether there is a viable alternative acquirer); and
• the likely effect on competition of the proposed acquisition.

Australia’s merger control regime is not subject to turnover thresholds. Rather, the ACCC’s policy is to further investigate proposed acquisitions which would be likely to result in:

• the acquirer having a market share of 20 per cent or more; and
• the products of the merger parties are either economic substitutes or complements.

Australia’s merger control regime does not contain a mandatory notification procedure. However, where a proposed merger would be likely to substantially lessen competition in Australia and the parties proceed with the merger without first having obtained clearance from the ACCC, they bear the risk that the ACCC will seek an injunction, or orders for divestiture or to void the acquisition, civil pecuniary penalties of up to A$10 million in the case of corporations and up to A$500,000 for individuals involved in the breach, orders disqualifying individuals from holding management positions and orders for legal costs.

The practical effect of the ACCC’s enforcement powers is that Australia has a much used voluntary notification procedure for mergers. An acquirer of shares or assets may notify the ACCC of their proposed acquisition as a matter of courtesy, or seek informal or formal clearance for their proposed acquisition from the ACCC, or (based on public benefits) apply to the Australian Competition Tribunal for authorisation of their proposed acquisition.

There have been no applications for formal clearance in Australia to date. However, we predict that the formal clearance process will be used in Australia in the future, especially where the acquirer is expecting complaints and desires greater transparency around the identity of the complainants and nature of the complaints than is allowed under the informal clearance procedure.

Applicable legislation

Section 50 of the Act

Merger specific provisions have been in effect since the enactment of the Trade Practices Act in 1974. Between 1977 and 1992, the test for determining whether or not an acquisition was contrary to section 50 of the Act was a ‘dominance’ test, which prohibited only those transactions where the acquiring entity would be placed ‘in a position to control or dominate a market’, post acquisition.

In 1992, the test in section 50 was amended to replace the dominance test with a prohibition in section 50(1) which provides that a corporation must not directly or indirectly acquire any shares or assets of another person if the acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in any market in Australia.

The current test examines the level of competition in a market and whether or not the acquisition will have the effect or likely effect of reducing the level of competitive rivalry in a particular market. In order for section 50 to be enlivened, an acquisition must have the effect (or the likely effect) of reducing the level of competitive rivalry in a particular market in a substantial way, which has been interpreted to mean a reduction in competition that is ‘real’ or ‘of substance’.¹

As part of the 1992 amendments, a new section 50(3) was also inserted into the Act. This section sets out a non-exclusive list of matters that must be taken into account in determining whether the particular acquisition would have, or be likely to have, the effect of substantially lessening competition in a market.

In 2006, flowing from the recommendations made by the 2003 review of the competition provisions of the Act by the Dawson Committee, further procedural amendments were made to the Act including the introduction of a formal merger clearance process (to operate alongside an informal process the ACCC had developed over time).

In 2010, the Australian Government proposed amendments to section 50 of the Act in order to address the Government’s concerns about what are described as ‘creeping acquisitions’. The bill introducing these amendments lapsed at the end of 2010, and although the Government expressed its commitment to introducing the amendments,² at the time of writing it has not been reintroduced into the legislative schedule.

Section 50A of the Act

Section 50A was inserted into the Act in 1986. This section applies to offshore acquisitions of shares where the acquisition would result in a change in control of an Australian subsidiary, the acquisition would be likely to have the effect of substantially lessening competition in Australia and would not be likely to result in a countervailing public benefit. If the elements of section 50A are satisfied, the Australian subsidiary can be prevented from carrying on business in the affected Australian markets.

Section 50A is subject to a non-overlap provision which states that where an acquisition is subject to sections 50 and 50A, the acquisition shall be subject to section 50. The combination of the non-overlap provision, the broad scope of section 50 and the approach the ACCC adopts in relation to offshore acquisitions which result in a change of control of an Australian subsidiary that would be likely to substantially lessen competition in a market in Australia mean that, in practice, there are very limited circumstances where section 50A will apply. Accordingly, the focus of merger control in Australia is the application of section 50.

Application of the legislation

Sections 50(1) and (2) of the Act prohibit direct and indirect acquisitions of shares or assets, if the acquisition would have the effect or likely effect of substantially lessening competition in a market in Australia.
Despite some constitutional restrictions on the application of federal legislation in Australia, the Act has been drafted such that it can apply to purchasers who are natural persons, an association of natural persons, or a corporation. The vendor may be a natural person, an association of natural persons, a corporation, or a body corporate.
Under the Act, a corporation is defined to include a foreign corporation, a trading or financial corporation formed within the limits of Australia, a body corporate incorporated in Australia, or the holding company of a corporation.³
An ‘acquisition’ includes the acquisition of any legal or equitable interest in an asset or shares and has been held to include the creation of interests such as an option over shares, as this constitutes the conveyance of an equitable interest in the shares.⁴
In terms of extraterritorial operation, aside from section 50A, section 5(1) of the Act extends a number of its provisions (including section 50) to conduct outside Australia engaged in by Australian citizens or residents, as well as corporations carrying on business in Australia. Applying this extension, in conjunction with the requirement in section 50 for the market affected to be a market ‘in Australia’, provides the potential for section 50 to have application to transactions that occur offshore, where the acquirer carries on business in Australia.⁵

The test for a substantial lessening of competition

Case law in Australia has so far provided that an acquisition may be likely to have the requisite effect on competition where there is a ‘real chance’ of this being the case, which is considered to import a lower evidentiary threshold than one which requires it to be ‘more probable than not’.⁶
Importantly, the effect, or likely effect, of a proposed acquisition must be distinguished from pre-existing market characteristics and trends that are occurring, or are predicted to occur independent of the proposed acquisition. It is only the former that is relevant for the purposes of section 50.

‘Substantial lessening of competition’ vs ‘dominance’

Whereas the previous test of ‘dominance” was focused upon whether the acquisition would give the acquirer such a commanding influence on the market that effective competition would be prevented, the substantial lessening of the competition test can be contravened if competition is affected, even if the acquiring firm does not obtain a dominant position itself.⁷

‘Future with or without test’ and the counterfactual

The test employed in section 50 analysis is described as a ‘future with and without’ test. This test involves an assessment of the likely future state of competition in the relevant market ‘with’ the proposed acquisition, compared to the likely future state of competition in the relevant market ‘without’ the acquisition. A consequence of this test is the need for assessment of a counterfactual scenario that involves the acquisition not proceeding (the ‘without’ test).
In the majority of cases, the status quo would be the most appropriate counterfactual, although this does not mean that future changes to the market that can be reasonably predicted (such as an impending new entrant) cannot be taken into account.

Market definition

As with many aspects of competition law, market definition is a fundamental aspect of the mergers test. This involves consideration of four separate dimensions of the market being the product, geographical, functional and temporal dimensions. A purposive approach is taken to market definition in Australian competition law (that is, the appropriate market definition depends upon the issues for determination). In considering that purpose, it is necessary to identify the sources of actual and potential competition, the existence of which could constrain the merged entity’s activities.
Case law in Australia has recognised that there will be overlap between markets and that the outer limits of a market are likely to be blurred. Value judgments are involved in determining market definition, which does allow some room for legitimate differences of opinion.⁸
As section 50 is currently drafted, any ‘substantial’ market in Australia that may be affected by a proposed acquisition must be taken into account (this is not restricted to the market in which the acquisition occurs). This can include a market that is geographically limited to a particular state, territory or region of Australia.

Merger factors

Section 50(3) of the Act outlines a list of factors that must be considered when determining whether a particular acquisition has, or is likely to have, the effect of substantially lessening competition in a relevant market. The factors contained in section 50(3) are not exhaustive, and additional factors may be relevant and considered.
The factors that must be considered under section 50(3) are as follows:

Import competition

This factor requires assessment of the level of actual and potential competition from foreign firms into Australia. Import competition (or the potential for it) is considered by the ACCC as having the potential to constrain domestic firms from acting both unilaterally or in a coordinated fashion. The ACCC has stated that it considers this will be more likely in situations where, among other things, independent imports have comprised at least 10 per cent of total sales in the relevant market for each of the previous three years.⁹

Barriers to entry

The relative height of any barriers that prevent new entrants from competing in the relevant market is an important factor in the assessment of the likely state of competition if a merger is allowed to proceed. A barrier to entry can include any feature of a market that prevents, limits or discourages new entry (such as extensive regulatory approval processes), or otherwise places new entrants at a competitive disadvantage (such as high sunk costs, or where existing participants enjoy entrenched vertical relationships). In assessing the height of any barriers, the ACCC takes the view that new entry ‘must be timely, likely and sufficient in scope and nature to be effective’.¹⁰

In respect of these barriers, the predecessor to what is now the Australian Competition Tribunal has stated that ‘it is the ease with which firms may enter which establishes the possibilities of market concentration over time; and it is the threat of new entry of a new firm or new plant into a market which operates as the ultimate regulator of competitive conduct’.¹¹

Market concentration

While there are no formal ‘thresholds’ for market share or level of market concentration in Australia, market concentration is an important part of merger analysis. Previously, the ACCC had established a set of ‘safe harbour’ thresholds for market concentration, based on a four firm concentration test, which provided that a merger would only require further review if either:

• the merged firm would have more than 40 per cent market share; or
• the merged firm would have more than 15 per cent market share and the concentration ratio of the four largest firms in the market (known as the ‘CR4’) was more than 75 per cent .

However, in its 2008 Merger Guidelines, the ACCC adopted instead the Herfindahl-Hirschman Index (HHI) which it uses as a ‘preliminary indicator’ to assess the likelihood that a merger may pose competition concerns. According to the ACCC, it is less likely to examine mergers that produce:

• a HHI of less than 2000; or
• a HHI of more than 2000, but with a pre- and post-merger difference (or ‘delta’) of less than 100.¹²

In practice, the ACCC’s policy is to further investigate proposed acquisitions which would be likely to result in:

• the acquirer having a market share of 20 per cent or more; and
• the products of the merger parties are either economic substitutes or complements.

Degree of countervailing power

Any assessment of the state of competition in a market must take into account the extent to which customers have the capacity to impose demand-side constraints on the merged firm acting in an anti-competitive manner. For countervailing power to be an effective constraint, the ACCC has made clear that it is not sufficient merely for the relevant market to have commercially and/or financially substantial customers. For customers to be able to constrain anti-competitive behaviour (such as a rise in prices) the ability of such customers to bypass firms acting in such a manner must constitute a ‘credible threat’.¹³ In other words, customers who cannot source alternative or substitute supplies from firms other than the merged entity are unlikely to have ‘countervailing power’ for the purposes of the Act.

Acquirer’s ability to significantly and sustainably increase prices or profit margins
This factor is directed at assessing whether the acquisition itself will give the merged firm the ability to increase prices or profit margins. Factors that may allow such price increases but arise independently of the acquisition (such as an increase in global commodity prices, for example) are not relevant to the assessment of the effect of the acquisition on competition in the relevant markets.

Availability of substitutes

While a key element of market definition is the scope of the product market, ‘the future with or without’ element of the test in section 50 allows consideration of the alternative sources of supply that customers could look to as a means of constraining the merged firm in a post-acquisition environment. This could include functionally-differentiated products that consumers are able to switch to in preference to those supplied by the merged entity, in the event of any attempt to increase its prices post-acquisition.

Dynamic characteristics of the market: growth, innovation and product development

The forward-looking nature of the merger test in Australia facilitates an examination of the future composition of the relevant markets under this factor. It allows weight to be given to matters such as the expected level of growth (or contraction) in the size of the market in real terms, the likelihood of technological innovation, and the potential for the evolution of dynamic factors on both the demand side (such as customer preferences) and the supply side (such as transport and logistical matters).

The ACCC requires any assessment under this factor to be supported by ‘robust evidence’ (rather than mere speculation), so demonstrable market characteristics and trends are likely to be of assistance in assessing the competitive impact of a merger. For example, the ACCC acknowledges that a market which is characterised by rapid product innovation may be less stable and therefore any increases in market power gained via a merger may be only transitory.¹⁴

Further, although section 50(3) does not expressly include any consideration of efficiencies that can be gained from a merger as part of the mandatory factors, where such efficiencies can be appropriately quantified in terms of the future characteristics of the market, it is possible to incorporate them into an assessment of this factor.

Removal of a vigorous and effective competitor

This factor again highlights the emphasis on a competitive analysis that examines more than just the structural elements of the market under the ‘substantially lessening competition’ test in section 50. A firm without a substantial market share may still be considered a vigorous and effective competitor if it behaves in a manner that is in some way ‘maverick’, such as by being a price leader or innovator. Such participants often act in a way that makes their commercial strategy less predictable than that of other firms. The acquisition of such a firm by a horizontal competitor may have greater risk of substantially lessening competition, by virtue of the fact that it removes a key competitive constraint from the acquirer and may also mean that the post-merger market is more susceptible to co-ordinated conduct.¹⁵
In contrast, if it can be demonstrated that the target firm is not the closest or most vigorous competitor to the acquirer, this can assist in arguments that the merger will not substantially lessen competition because the constraints on the merged firm presented by other competitors will remain in place in the future market.

The degree of vertical integration

Whilst the ACCC acknowledges that many mergers involving firms at different levels of the vertical supply chain will have no anti-competitive effects, this factor requires consideration of whether or not the merged firm may be able to take advantage of any vertical integration in a way that enables it to use its market power at one stage of the production process to foreclose access by rivals in upstream or downstream markets to a key input, thereby limiting the competitive capabilities of those rivals. Situations in which one of the merger parties possesses an asset with a natural monopoly in a vertically adjacent stage of production (for example an electricity generator acquiring a distribution, or ‘poles and wires’ business) are likely to come under more scrutiny under this factor.

Coordinated effects

In some of its recent merger reviews, the ACCC has given more express consideration to the extent to which the circumstances of a proposed merger may give rise to the potential for coordinated effects.¹⁶ This assessment primarily involves asking whether the remaining firms in a market would have the incentives and ability to compete less vigorously. Key indicators that the ACCC typically looks for include whether the market is sufficiently concentrated, stable and transparent (particularly in terms of pricing information) such that it would be possible for competitor firms to be able to achieve an effective level of coordination.

While theories of competitive harm in merger analysis have always noted the possibility of coordinated effects, the ACCC’s recent focus on this issue is instructive for future transactions and merger parties should ensure they have considered the potential for such effects to arise as a consequence of their proposed transaction when approaching the ACCC for approval.

Options for merger clearance in Australia

Overview

In Australia, there is no compulsory pre-notification requirement for mergers or acquisitions of any kind. However, the ACCC has outlined what is known as an ‘indicative’ notification threshold in its 2008 Merger Guidelines. Essentially, where the merger parties supply products that are substitutable or complementary, the parties are encouraged to notify the ACCC if the merged firm will have a market share of more than 20 per cent in any relevant market.¹⁷

Where a merger does not meet the notification thresholds, and the parties otherwise consider that a proposed acquisition is uncontroversial and is unlikely to give rise to any concerns under the merger test, they can proceed without notification, or may consider informing the ACCC of the proposal as a matter of courtesy.

For parties that exceed the threshold, or are otherwise seeking a greater degree of comfort regarding the approach of the ACCC to the competitive impact of their transaction, three options are available:

• an informal merger review;
• a formal (statutory) clearance decision; or
• a merger authorisation from the Australian Competition Tribunal, based on public benefits.

Although the statute-based formal merger clearance process has been in place in Australia since 1 January 2007, it has not been used to date. The most common method by which merger parties seek the ACCC’s views on an acquisition or merger for the purposes of section 50 is through the informal merger review process, which is an administrative, non-binding process operated by the ACCC.

ACCC informal merger review

The ACCC informal approval process is governed by the Merger Review Process Guidelines (July 2006), as well as through the adoption of the analytical concepts set out in the 2008 Merger Guidelines.

An informal clearance decision from the ACCC typically takes the form of a non-binding ‘no action’ letter indicating that, on the basis of the information before it, the ACCC does not intend to oppose the transaction. Alternatively, if the ACCC finds any concerns with the transaction, it may inform the parties that it opposes the transaction. The non-binding nature of this review process means the communication of either view to the merger parties does not preclude the ACCC from changing its mind in respect of a proposed transaction, although in practice this is unlikely, unless the ACCC receives new information about the merger.

Enforceable undertakings

Where the ACCC has concerns about the competitive effects of a merger, it may be possible for the parties to negotiate with the ACCC to accept court-enforceable undertakings from the parties, which the ACCC has the power to do under section 87B of the Act.¹⁸ Such undertakings may be accepted by the ACCC if they sufficiently allay the ACCC’s concerns relating to the likely anti-competitive effects of a proposed acquisition.
The Commission has typically accepted undertakings in the context of mergers for one of two purposes:¹⁹

• to ensure that an acquisition is not completed until the ACCC has had the opportunity to conduct the appropriate market inquiries; or
• to resolve matters where the proposed acquisition is, in the ACCC’s view, likely to contravene section 50 of the Act.²⁰

Commencing an informal review

An informal review process can be commenced by the parties approaching the ACCC. This can be done on a confidential basis in circumstances where a merger has yet to be publicly announced. Once an acquisition is in the public domain, however, the ACCC will only proceed with a public review (which may include market inquiries to verify its assessment of the matter).

There are no prescribed information requirements for a request to the ACCC for an informal merger review and no application fee is payable. However, as the ACCC will not commence a review until it has been provided with sufficient information about the transaction and its possible competitive effects, it may be necessary to provide a substantive submission that contains sufficient information and analysis and addresses the application of section 50 (including the factors in section 50(3)).

Reviews where ACCC not notified by the parties

It is not necessary for parties to a proposed transaction to approach the ACCC in order for it to inquire into a proposed merger. If the ACCC is made aware of a transaction by other means (for example, it may be notified by the Foreign Investment Review Board in the case of a transaction that triggers the Australian Government’s policy in relation to foreign investment), the ACCC may commence inquires into the merger of its own volition. This would typically involve the ACCC sending the parties a request for information about the proposed transaction.

Process and timelines

Upon receipt of appropriate information from the parties (or at least the acquirer) the ACCC will commence an informal review. The process can be illustrated by the diagram below.²¹

Timelines

As the informal merger clearance is not statutory, it does not benefit from stipulated time frames. However, to provide merger parties and their advisers with greater certainty, the ACCC’s Merger Review Process Guidelines state that the ACCC will typically reach a decision on a confidential basis within two to four weeks of commencing its assessment and will typically reach a final decision within a six to eight week time frame once a merger proposal is in the public domain.

However, in the case of more complex mergers, this indicative time frame may be extended. This will happen if, after its initial investigations (including market enquiries), the ACCC releases a Statement of Issues because the proposed acquisition gives rise to some concerns, or because the merger parties offer court enforceable undertakings to resolve any concerns. The Merger Review Process Guidelines provide that the ACCC will aim to reach a decision within a total time frame of 12 weeks from when the public review commenced.

Options after an ACCC informal review

It is unclear whether an informal merger clearance from the ACCC is a ‘decision’ susceptible to review under Australian administrative law. To the extent that it is, the relief available to parties would be limited to largely procedural remedies (such as a review of the decision by the ACCC, or the publication of reasons, for example) rather than any substantive relief.

In addition, the informal merger clearance process does not enjoy any direct appeal mechanism. Where an ACCC informal clearance is refused, if the merger parties still wish to proceed they have the option of seeking a declaration from the Federal Court that the merger would not contravene section 50 of the Act. Such a declaration requires a substantive Federal Court proceeding, which is likely to take between three to six months.

Only the ACCC has the power to seek a pre-emptive injunction to prevent the implementation of a merger. This is a deliberate policy position in Australia, which is intended primarily to prevent the competition laws from being used to frustrate a transaction for strategic commercial purposes by private entities (such as the merger parties’ rivals).

Once a merger has completed, parties (including the ACCC) with a sufficient interest in the merger have the ability to seek a declaration in the Federal Court that a merger contravenes section 50 of the Act within three years of the transaction completing. If such an application is successful, the remedies available to the applicant include the ability to seek a divestiture order from the court to unwind the offending merger, as well as the award of civil damages. Even where a declaration is made, such an order is entirely at the Court’s discretion, and is not issued lightly.

Formal merger clearance process

A formal merger clearance process came into effect in Australia on 1 January 2007. This process operates in parallel with the existing informal merger clearance process.

A clearance decision granted by the ACCC pursuant to the formal merger clearance process is binding and confers statutory immunity from proceedings from any third party.

The formal merger clearance process also has the advantage of clear, statutory time frames. The ACCC has 40 business days in which to make a decision from the date of application. This may be extended by agreement with the parties during the initial 40 day time period, or unilaterally by the ACCC for an additional 20 business days. If the ACCC does not formally clear the merger within that time period, it is deemed to have made a decision not to clear the merger.

The ACCC’s decision not to grant a clearance is subject to a limited merits review, essentially ‘on the papers’, before the Australian Competition Tribunal. The Tribunal must make its decision within 30 business days or, if it considers the matter complex, within an additional 60 days.²²

Applications for a formal merger clearance decision are made on a prescribed form (Form O), which requires merger parties to provide extensive documentary and market information, including any expert economic papers on which the applicant wishes to rely. An application for a formal merger clearance also attracts a fee, currently set at A$25,000.

Subject to any claims for confidentiality, the applicant’s Form O and supporting information will be made publicly available on the ACCC’s online mergers register. Submissions received from interested market participants during the course of the ACCC’s market inquiries will also be published on the ACCC’s mergers register, subject to any claims for confidentiality.

As noted above, although this formal process has been available since 2007, it is yet to be used by any merger parties. Some of the reasons for this are likely to be concerns about the degree to which information from the parties will remain confidential under this formal process, the extensive requirements for information (including the strict requirements for expert reports, where they are used) and the significant fees involved (when compared to the informal process).

Merger authorisation

If parties require a greater degree of regulatory certainty, they may consider seeking a formal merger authorisation from the Australian Competition Tribunal.

The Tribunal may only grant an authorisation if the merger parties are able to demonstrate that the proposed acquisition will give rise to net public benefits which outweigh any public detriments that flow from any lessening of competition. The ACCC’s Merger Guidelines note that if a merger is likely to achieve significant efficiencies, but nonetheless amounts to a substantial lessening of competition, the merger may only proceed if it is authorised by the Tribunal.²³

The Tribunal must make its decision within three months or, if the merger raises complex issues, within six months.

Given the onus of demonstrating that public benefits arising from the merger outweigh any public detriments, as well as the potentially lengthy time frames which apply, merger authorisations are rarely sought.

Notes

1

AGL v ACCC (No 3) (2003) 137 FCR 317.

2

The Hon. Craig Emerson, ‘Government to secure powers to deal with creeping acquisitions’, Media Release, 22 January 2010.

3

See the definitions of these in section 4 and 4A(4).

4

TPC v Arnotts Ltd (1990) ATPR ¶41-062.

5

TPC v Australian Iron and Steel Pty Ltd (1990) 22 FCR 305.

6

Australian Gas Light Company v ACCC (No 3) (2003) 137 FCR 317, at 415 per French J.

7

Trade Practices Amendment Bill 1992 (Cth) Explanatory Memorandum.

8

Queensland Wire Industries Pty Ltd v BHP (1989) 167 CLR 177.

9

ACCC: Merger Guidelines (November 2008), [7.35].

10

ACCC: Merger Guidelines (November 2008), [7.19].

11

Re Queensland Co-Operative Milling Association Ltd (1976) 8 ALR 481 at 516.

12

ACCC: Merger Guidelines (November 2008) [7.14].

13

ACCC: Merger Guidelines (November 2008) [7.50]-[7.51].

14

ACCC: Merger Guidelines (November 2008) [7.53]-[7.55].

15

ACCC: Merger Guidelines (November 2008) [7.56]-[7.57].

16

Recent merger reviews in which coordinated effects have been raised include National Australia Bank’s proposed acquisition of AXA Asia Pacific (2010), Caltex Australia’s proposed acquisition of the retail assets of Mobil Oil Australia Pty Ltd (2010); Cargill Australia’s proposed acquisition of Goodman Fielder’s fats and oils business (2010), and Link Market Services proposed acquisition of Newreg Pty Ltd (2010).

17

ACCC: Merger Guidelines (November 2008) Section 2.

18

Section 87B provides: “The Commission may accept a written undertaking given by a person for the purposes of this section in connection with a matter in relation to which the Commission has a power or function under this Act (other than Part X).”

19

Non-confidential aspects of section 87B undertakings are usually publicly disclosed in an “Undertakings register” on the ACCC website.

20

ACCC: Merger Guidelines (November 2008) paragraph 7.3.

21

ACCC: Merger Review Process Guidelines (July 2006), page 8.

22

This review process is set out in Division 3 of Part IX of the Act.

23

ACCC: Merger Guidelines (November 2008) [7.66].