In an opinion article in the AFR, restructuring partner Genevieve Sexton warns that radical changes to Australia’s merger clearance laws that come into effect on New Year’s Day 2026 pose a real and deeply problematic impediment to the effectiveness of turnaround and restructuring in Australia.
“For decades, our formal restructuring regime has prioritised the rejuvenation of insolvent companies (or as much of them as can be saved) by legislating for swift and decisive processes,” Genevieve explains. “In the context of Australia’s competition landscape, we’re now moving from a voluntary, informal clearance system to a mandatory notification clearance system (where certain monetary or control thresholds are met).
“While the key underlying prohibition to protect competition remains the same – a person or corporation cannot acquire shares or assets if the acquisition would have the effect or likely effect of substantially lessening competition - these reforms fundamentally change how people engage with, and get clearance from, the ACCC.”
Merger parties who exceed the notification thresholds will no longer have the option of seeking sanction of a transaction from the Federal Court but, as Genevieve outlines, the central problem is an even simpler one: mandatory notification costs time and money, each of which is in short supply in the restructuring landscape. “The irony is that competition also suffers if a company cannot continue to trade. Nothing affects competition as much as the total removal of a competitor from the market.”
Identifying two relatively simple amendments that could be made to the legislation that would avoid potentially devastating consequences, Genevieve concludes that: “As much as the government wants to encourage active competition, the objective would be more effectively achieved in balance with the aims of Australia’s restructuring laws, rather than in contest with them.”
To read the full article, click here.
To read a submission to Treasury on the new merger regime from TMA Australia, click here.
