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Pre-merger Notification and the Trade Practices Act 1974

Office of Regulation Review submission

This submission was released in February 1995. The submission assesses the Trade Practices Commission’s need for more, and more timely, information from firms intending to merge.

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Cover, Contents

1   Introduction

2   The Treasury Pre-merger Notification Proposal

3   Problems with Merger Oversight
3.1   Insufficient notice — midnight mergers
3.2   Excessive litigation costs
3.3   The inability of a divestment order to restore competition

4   Concerns with the Proposed Scheme
4.1   There are few ‘midnight mergers’
4.2   The proposed asset threshold
4.3   Does minority ownership deliver effective corporate control?
      What is control?
      When does a minority interest offer control?
      Control thresholds in other legislation
4.4   Costs of pre-merger notification
      Costs to merging parties
      The efficiency of the market for corporate control
      Opportunity costs to the TPC’s enforcement program

5   Some Less Burdensome Approaches to Pre-merger Notification
5.1   A shorter notification period
5.2   A corporate duty to notify

6   Conclusion


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