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Antitrust environment ‘increasingly tough’ for dealmakers in Australia

A new report has revealed the impact antitrust authorities had on M&A in 2023, showing that prohibited transactions rose by more than 50 per cent.

user iconLauren Croft 22 March 2024 Big Law
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Antitrust authorities continued to have a big impact on M&A in 2023, blocking more deals and intensifying scrutiny of digital and private equity transactions, according to A&O’s latest Global Trends in Merger Control Enforcement report.

The report analysed data on merger control activity in 2023 from across 26 jurisdictions, focusing in particular on the US, EU, UK and APAC.

In Australia, intense scrutiny of M&A deals is predicted to continue throughout this year, after the Australian Competition and Consumer Commission (ACCC) blocked four deals in 2023 – the highest number since A&O began its reports. The ACCC also completed seven phase two reviews in total, the largest number since 2019.


In Australia, dealmakers are “facing an increasingly tough antitrust environment”, according to A&O Sydney partner Lisa Emanuel.

“The landscape is constantly evolving. Major reforms to the Australian merger control regime are planned. Internationally, we are also seeing authorities increasingly seeking and using powers to review M&A that falls below merger control filing thresholds. This creates complexity and uncertainty for merging parties,” she said.

“Private equity has also come under particular scrutiny, with firms which hold minority stakes in rival businesses flagged as a potential antitrust concern by the ACCC, owing to their power to make competitively significant decisions.”

Proposed reforms and major amendments to merger control rules are also being considered by the Australian government.

“These include, most radically, a shift from the current voluntary system to a mandatory and suspensory regime, potentially coupled with a power to call in deals falling below notification thresholds. Amendments to the substantive test, including prohibiting deals that entrench, materially increase or extend market power, have also been put forward,” the report stated.

As in the previous year, the A&O data suggested that the level of antitrust intervention in the tech sector (11 per cent) was comparatively lower than the proportion of global M&A accounted for by tech deals (25 per cent). However, this is up from just 8 per cent in 2022, with the number of tech sector deals frustrated by antitrust authorities tripling in 2023.

Overall, antitrust intervention in 2023 focused on consumer, life sciences, transport and energy deals – but 20 per cent of deals blocked in 2023 were within the tech sector.

In addition, debates have continued over the kinds of sustainability claims that can be taken into account in merger control assessments.

“As countries work to meet their green transition targets, we expect sustainability and environmental arguments to feature more heavily in merger control reviews. However, with a patchwork of positions emerging, a harmonised approach by authorities across jurisdictions is unlikely. Parties should be aware that sustainability related arguments resonating with some authorities will likely gain no traction with others.”

Emanuel added that in 2023, the ACCC for the first time conditionally cleared a transaction on environmental benefits grounds.

“Australian regulators have shown they are willing to make allowances where sustainability benefits outweigh competition concerns; for instance, 2023 saw the notable conditional authorisation of Brookfield and MidOcean’s acquisition of Origin Energy, due to its potential to accelerate the country’s energy transition.”

Looking ahead, the firm predicted that the number of deals subject to regulatory conditions will likely increase further through 2024.