June 13, 2024

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Mergers and Acquisitions Law in Australia

Mergers and Acquisitions Law in Australia: Navigating Complex Transactions  and Protecting Your Interests - Pentana Stanton

Mergers and acquisitions refer to transactions in business environments in which the ownership of business organisations or companies are transferred to another company.  There are various types of mergers and acquisitions. They allow companies to expand their collective operations and gain competitive advantage in the market.

Specifically, when two businesses combine and form a unique, new legal entity under one corporate name, the process is referred to as a merger. Whereas, in an acquisition, one company purchases the other company. As a result, the acquiring company will have majority stakes in the acquired company. Note that in a simple acquisition, typically, the acquired company can keep its name and structure.

There are a variety of types of mergers and acquisitions. Depending on the features and circumstances of the companies involved, different type may be suitable for them:

  • Consolidation
  • Vertical merger
  • Horizontal merger
  • Asset purchase
  • Statutory merger
  • Triangular merger
  • Share or interest acquisition, etc

Laws related to mergers and acquisitions

The Trades Practices Act (1974) is the main law that governs mergers in Australia. This is a federal legislation. Another important legislation dealing with this is the Competition and Consumer Act (2010). If mergers can substantially lessen competition, the Competition and Consumer Act can prohibit those mergers.

Notably, the Australian Competition and Consumer Commission (ACCC) review mergers. If they feel that any particular merger is not fair as it can lessen competition, it 

can prevent the merger.

The Corporations Act (2001) also contains provisions related to acquisition of shares and assets. The Australian Securities and Investment Commission (ASIC) usually regulates takeovers through the provisions listed under the Corporations Act. 

Moreover, because mergers and acquisitions impact the structure of company, it is important to consider tax implications as well. For this reason, the Income Tax Assessment Act (1997) also has relevant provisions in relation to mergers and acquisitions. 

Finally, as mergers and acquisitions also deal with transfer of employees, even employment legislation is relevant. For instance, the Fair Work Act 2009 governs employment law matters. 

Lawyers for mergers and acquisitions

Corporate and commercial lawyers can help with mergers and acquisitions as the law, rules and regulations can get complex. They can represent the interests of your company while negotiating transactions, employing contracts and workplace advisory etc.

Moreover, lawyers play a key role if there are disputes. They can provide dispute resolution services. 

Author info:

JB Solicitors is a leading law firm based in Sydney offering services across property law, immigration law, family law, criminal law, employment law and commercial law among others.