A recent statement by the Australian Competition & Consumer
Commission (ACCC) chairman Graeme Samuel suggests that the ACCC may
take a tougher stance on undertakings given during the informal
merger approval process, or consider bringing to an end its
practice of accepting such undertakings altogether.
Of particular concern to the ACCC are instances of 'bad
faith' where the conduct of a party changed once an undertaking
had been accepted by the ACCC and the merger completed. Mr Samuel
'Before a merger is cleared, the priority of merger parties
and their advisers is to get the deal done. Once the transaction is
completed however, priorities shift and some parties view the
undertaking commitments given to the ACCC as annoying constraints
on their commercial strategies. Their priority becomes minimising
the impact those undertakings have on their business... If the
gaming of the undertaking process continues, the ACCC will have to
seriously look at whether undertakings are an effective solution to
dealing with problematic takeovers, or whether we need to seriously
consider removing them from our consideration'.
Such comments can only be viewed as a stark warning that the
ACCC is intent on closely monitoring and policing all future
undertakings given in the informal merger clearance process, and
will increasingly hold parties accountable for forgotten promises
and breaches of good faith.
Phillips Fox has changed its name to DLA Phillips Fox
because the firm entered into an exclusive alliance with DLA Piper,
one of the largest legal services organisations in the world. We
will retain our offices in every major commercial centre in
Australia and New Zealand, with no operational change to your
relationship with the firm. DLA Phillips Fox can now take your
business one step further − by connecting you to a global
network of legal experience, talent and knowledge.
This publication is intended as a first point of reference
and should not be relied on as a substitute for professional
advice. Specialist legal advice should always be sought in relation
to any particular circumstances and no liability will be accepted
for any losses incurred by those relying solely on this
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
In some cases these fees or surcharges are higher than what a bank charges to these merchants for use of the system.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).