The Trade Practices Amendment Bill, which was introduced into the Senate late last year, will lead to significant changes to the way the competition aspects of a proposed merger are assessed and could lead to less M&A activity if it is passed. However, rather than having a dampening impact on law firm profitability, according to Brett Bolton, a specialist in competition and trade practices law at HopgoodGanim Lawyers, law firms could well benefit.
The changes would require the ACCC to apply a lower test to determine whether an acquisition or merger could have a noticeably negative affect on competition in a market. This would result in a significant reduction in the number of mergers and acquisitions approved each year.
As it stands, a party that is interested in merging with or acquiring another business often approaches the ACCC informally to see if there will be any hurdles that need to be overcome. Bolton said that organisations are likely to bring in competition lawyers prior to that engagement if the law is passed.
“One would expect that it’s going to make commercial organisations more inclined to approach their lawyers and say ‘this is what we’re proposing to do, do you think this is going to get through under the new test?” he said, adding that the new laws would likely increase revenues for law firms acting in the area.
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