AUSTRALIA Trends and Developments Contributed by: Mark Grime and George Lukic, Thomsons
Serial acquisitions and look - back The mechanics of the three-year look-back and sub - stitutability for aggregation have fundamentally trans - formed risk assessment for private equity sponsors and platform roll-up strategies. Deal teams should be aware that even non-controlling stakes can trig - ger review if they confer material influence or are part of a broader investment strategy. The legal ambiguity centres on substitutability. If a decentralised private equity fund acquires a minor European component supplier that has a small Australian market presence, that deal may be aggregated with an entirely sepa - rate portfolio company’s Australian acquisition from two years prior. ACCC guidance makes it clear that serial acquisitions are a policy focus, but it leaves sub - stantial room for judgement on how substitutability should be assessed in mixed-service or local-market settings. Parties undertaking such transactions should expect close scrutiny of internal documents, board papers and market descriptions. The practical conse - quence is that serial acquirers need repeatable com - pliance systems, centralised records and a disciplined methodology for assessing overlap across prior deals. Implications for doing deals in Australia Australia’s new merger regime has also profoundly changed procedural risk associated with doing deals with an Australian nexus. FIRB and ACCC parallel processing Foreign investors must now navigate a more com - plex dual-regulatory pathway where Foreign Invest - ment Review Board (FIRB) and ACCC approvals may both be critical to execution. In many transactions, particularly cross-border acquisitions of Australian businesses or assets, the practical issue is not simply whether each approval is required, but how the two processes interact in timing, information flow and deal certainty. Although dual regulatory requirements also existed under the previous ACCC regime, published guidance on FIRB and ACCC co-ordination remains limited, and there is no single official playbook for dual-track approvals under the two regimes. Although FIRB and ACCC reviews are different, there is increasingly substantial overlap in the factual mate - rial needed to support each application. Consistency of narrative across FIRB and ACCC applications is
essential, as regulators increasingly share informa - tion. Divergence in submissions can trigger extended reviews or information requests, making alignment critical for efficient processing. Because these two regulators share information behind the scenes and will not always require confidentiality waivers to do so, any divergence in narrative will almost always trigger extended reviews or information requests. The risk of divergent outcomes is a more difficult issue. A transaction may be acceptable to FIRB subject to conditions, but still face extended ACCC review. Equally, a deal may raise no material compe - tition concern but still attract FIRB scrutiny because of the acquirer’s ownership profile, the nature of the target’s assets or broader policy sensitivities. This means parties cannot assume that clearance from one regulator signals a smooth path with the other. There is evidence of longer deal timelines and more cautious structuring, including the use of conditional agreements and break fees to manage regulatory uncertainty. Deal documentation must also address the possibility that one approval arrives quickly while the other is delayed, conditional or refused. Early engagement with advisers and regulators is critical to mitigate delays and avoid unexpected intervention. Litigation risk : statements of reasons and follow - on actions The ACCC now publishes detailed statements of reasons for its merger decisions, increasing transpar - ency but also creating a more usable record for private litigants. In practical terms, a competitor, customer, supplier or class action claimant may seek to rely on the ACCC’s published analysis to frame pleadings, test causation theories, support an interlocutory appli - cation or justify targeted discovery. Even where the statement of reasons is not determinative evidence of liability, it can narrow the issues in dispute and give private parties a roadmap to the transaction ration - ale, market definition issues, internal documents likely to exist, and the third parties the ACCC considered important. This has significant implications for the way in which merger parties draft submissions, internal documents and advocacy. The management of confidential infor - mation must also be precise and well supported by
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