Federal election could impact M&A | Asian Legal Business

The looming federal election could have an impact on M&A workflows and commercial activity. Mallesons M&A partner Robert Jackson said it was common for business activity to slow when an election is called. “The imminent election will also see a pause in the amount of M&A,” he said. “This (election time) is typically a period for less activity, as investors wait for certainty on what the government will look like going forward”.

Greg Evans, director of economics and industry policy at the Australian Chamber of Commerce and Industry, said it is common for consumers and business to react to an election. “We get some changes in business and consumer behaviour during the election period,” he said. “In the lead-up to an election consumers become more conservative.”

However, Shaun Clyne, the head of M&A at Norton Rose Australia, said that for the most part Australia has a stable political landscape, regardless of election outcomes. Companies accept that government changes are part of this landscape. “This election is interesting, as we rarely see a substantial change in the legislative landscape as we have seen with the announcement of the mining tax,” Clyne said.
“It is the most substantive change in many years, and has given clients cause to sit back and wait and see.” He added that as the “bombshell” of the proposed mining legislative changes had already been dropped he didn’t expect many companies to continue waiting it out.

John Pagacs, special counsel at Australian Business Lawyers, said that while the big end of town might cool down with an election approaching, small to medium size businesses tend to show less concern. “SME’s will adapt and cope with any changes a new government might bring, but at the big end of town, larger companies may have to adapt at a policy level,” he said. “You would never know that an SME has a change in confidence because of an election campaign.”

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