Mergers and acquisitions law is a complex area. Whether you are a bidder, a target or an affected shareholder it is always necessary to obtain legal advice. Because of the impact that the merging of companies can have on the efficiency and competition within goods and services markets it is also a heavily regulated area of law.
The Corporations Act 2001 (Cth) has established rules referred to as ‘Takeover Rules’ which govern the way companies can go about initiating, negotiating and implementing mergers and acquisitions. This law is monitored and enforced by the Australian Securities and Investments Commission (ASIC).
The merging of companies in some markets can have the effect of substantially limiting competition. The Competition and Consumer Act 2010 (Cth) prohibits mergers and acquisitions that are likely to have this effect on a market. The Australian Competition and Consumer Commission (ACCC) is responsible for maintaining compliance with this prohibition.
As an officer of a bidding or target company there are many things you need to consider before initiating a takeover. A merger or acquisition can be one of the most important transactions that you are ever involved in. Understanding the regulatory framework and some of the key considerations for successful takeovers can pave the way for a cooperative and fruitful transaction.
See our Mergers & Acquisitions Law Overview Guide