AUSTRALIA Trends and Developments Contributed by: Mark Grime and George Lukic, Thomsons
“ Connection with Australia ” test The boundaries for foreign-to-foreign deals with indi - rect Australian effects remain a significant source of execution risk. ACCC materials indicate that the regime is intended to capture acquisitions with a real Australian commercial nexus, but they do not yet provide bright-line guidance for all indirect sup - ply models. The focus on revenue rather than physi - cal presence means that asset-light multinationals, such as software-as-a-service and digital business - es, can inadvertently trigger the mandatory thresh - olds. Determining whether a sufficient nexus exists requires a careful examination of the facts and a cau - tious approach where Australian revenue, customers or assets can be identified, even if the legal structure is entirely offshore. The implication for deal structur - ing is that parties may need to do diligence on Aus - tralian touchpoints much earlier, expand conditions precedent to cover filing uncertainty, and allow more time for internal revenue tracing and nexus analysis, particularly in a multi-jurisdictional context. Minority stakes : “ control ” versus “ voting power ” Objective “bright-line” voting power thresholds tests have been introduced alongside the general control test, mandating notification for share acquisitions that cross specified quantitative limits, regardless of whether a qualitative change of control occurs. These thresholds were introduced to capture minor - ity stake-building and creeping acquisitions that were previously difficult to regulate. Although introduced to provide greater clarity, the distinction remains diffi - cult in transactions involving governance rights rather than outright ownership and the expectation is that the ACCC will continue to look closely at govern - ance rights, negative controls and practical influence rather than shareholding percentage alone. That cre - ates uncertainty for deal teams structuring minority investments, joint ventures and staged acquisitions and parties may need to simplify governance rights, ring-fence competitively sensitive information, or sep - arate initial and follow-on investments more clearly if they want to reduce filing risk. Further proposed refinements to the definition of “associates” and joint control will provide further clarity and help reduce the over capture of otherwise competitively benign trans - actions, if enacted.
beyond the quick-clearance cohort and into Phase 2 review. Transactions involving obvious local overlaps, concentrated retail catchments or politically visible sectors are less likely to be treated as routine. The practical lesson is that parties should not assume that a transaction is low risk merely because it is modest in value or limited to a small number of sites. If the deal affects a concentrated local market, the safer course may be to prepare from the outset for a full notifica - tion, longer timetable and more detailed third-party testing. By contrast, many low-risk transactions appear to have used the waiver pathway successfully where the parties could present a clear and well-supported no-issues narrative. In practice, that tends to involve a disciplined submission that identifies the relevant products and geographies, quantifies overlaps, explains why customers have credible alternatives, and addresses any vertical links or portfolio effects before the ACCC asks. Early experience suggests that waiver applications work best where the parties do the analytical work upfront and present the transaction as one that can be screened out quickly on objective evidence rather than assertion. Taken together, these examples show four emerging patterns. First, local concentration and visible over - laps can push even relatively contained transactions into deeper review. Secondly, waivers are most effec - tive where the parties can prove the absence-of-com - petition concern with concrete evidence at the outset. Thirdly, serial acquirers and diversified groups need repeatable internal processes for threshold testing, look-back analysis and document collection. Filing strategy being treated as a commercial differentiator in deal execution is the fourth. Bidders and buyers who can explain their ACCC analysis clearly, identify likely timing with some confidence and show that they have already gathered the necessary information are viewed more favourably by sellers and financiers. Ambiguity and legal uncertainty remain Several areas of the new regime remain under-ana - lysed and continue to present practical challenges for merger parties and their advisers.
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