Australia: M&A risk from ACCC Statement of Issues (SOI)

Last Updated: 9 May 2014
Article by Nick McHugh and Claire Forster


When the ACCC decides to publish a Statement of Issues (SOI) there are flow on effects for potential transactions. We've crunched the numbers to determine how a SOI affects your exposure to M&A risk and in turn, your strategy.

Merger review in Australia

Where a merger or acquisition could have competition law implications in Australia, the usual course is for parties to seek an informal merger clearance from the ACCC prior to completion. Whilst parties are not obliged to notify the ACCC, failing to do so may result in the ACCC independently investigating the merger which can be disruptive. If the ACCC ultimately has concerns, it can take legal action to obtain a court order to block or unwind it.

Under its informal merger clearance process, the ACCC will consider whether or not a proposed transaction has the effect or is likely to have the effect of substantially lessening competition. In doing so, it may clear a transaction in "pre-assessment stage", or undertake a more in-depth review.

The review stats

Only a relatively small proportion of informal merger clearance applications are subject to an in-depth review by the ACCC that extends to market inquiries. In the 2012-13 financial year for example, only 76 of 289 applications (or 26%) were opened for review by the ACCC. The remainder were cleared in pre-assessment stage.

If, after review of the transaction and the making of market inquiries, the ACCC has real competition concerns about the transaction, it will release a Statement of Issues (to those in the know, an "SOI"). The Statement of Issues will detail the ACCC's concerns and seek public comment on these issues before the ACCC makes a final decision on whether or not to oppose the transaction.

A small number of Statements of Issues are published each year. In the 2012-13 financial year, only around seven non-confidential applications filed during that financial year progressed to a Statement of Issues. This was less than 3% of all merger filings for that period.1

Statistically, the release of a Statement of Issues means that the transaction has put the ACCC on comparatively high alert. On face value, the publication of a Statement of Issues may seem damning to the prospects of the transaction being cleared. However, the statistics tell another story.

Crunching the SOI numbers

Over the calendar years from 2008 and 2013, the ACCC published 63 Statements of Issues. The table below illustrates the ultimate outcome of the ACCC's deliberations where a Statement of Issues was published.

Calendar Year Number of SOIs issued Not opposed Not opposed (subject to conditions) Opposed Review
2008 14 43% 14% 14% 29%
2009 8 50% 12.5% 25% 12.5%
2010 12 39% 15% 23% 23%
2011 5 80% 20% 0% 0%
2012 14 36% 7% 43% 14%
2013 10 40% 30% 20% 10%
2008-2013 63 44% 16% 23% 17%

In the table above:

  • "Not opposed" refers to the applications which the ACCC concluded that the transaction would not be likely to substantially lessen competition.
  • "Not opposed (subject to conditions)" refers to the applications which the ACCC concluded would not substantially lessen competition, subject to the fulfilment of certain undertakings by the merger parties.
  • "Opposed" refers to the applications which the ACCC concluded would have the effect of substantially lessening competition, which equates to 23%.
  • Finally, 17% of applications over which the ACCC issued a Statement of Issues had the application withdrawn (review suspended). This may have been for a combination of commercial reasons, including deal fatigue or the passing of a deal sunset date and concerns that the ACCC would oppose the merger through the courts.

It is pertinent to note that whilst the statistics vary year-to-year, across the six years combined, conditional and unconditional approval made up 60% and only 23% of transactions found themselves formally opposed. This bodes as a positive reinforcement for entities that are subject to a Statement of Issues that it is more likely than not that their transaction will be cleared. Of course, the issuance of a Statement of Issues can be a wake-up call to merger parties and, assuming that sunset dates and other deal-related imperatives permit and/or require the parties to proceed, cause them to dedicate significant expertise and resources to answering the ACCC's concerns. That is one reason that could explain why the ACCC's concerns appear to be able to be dispelled more often than not.

Maximising your chances

So how then, do parties maximise the chance that the outcome of their transaction won't defy the statistics? Among other things, they should:

  1. judge the scale of notification/application required having regard to:
    1. the post-merger market position and counter factual;
    2. the likely market feedback and opposition to the transaction; and
    3. the ACCC's Merger Guidelines.
  1. if a Statement of Issues is released:
    1. comprehensively respond to matters raised in the Statement of Issues;
    2. engage directly with ACCC staff to obtain a sense of their key concerns; and
    3. consider whether or not there are any divestiture or behavioural undertakings that can be offered to the ACCC that might answer (or lessen) its concerns.

What if your deal is opposed?

For the most part, a transaction will generally not proceed if the ACCC opposes it. However, the informal merger clearance process is just that. An ACCC opposition in itself has no legal force and does not prevent a transaction proceeding.

Of course, if the ACCC is of the view that the transaction would be likely to substantially lessen competition in contravention of the Competition and Consumer Act, it can apply to the Court to have the transaction halted. Also, post-completion it is open to the ACCC to seek orders unwinding the deal and/or pecuniary penalties against merger parties in excess of $10 million. Whilst pecuniary penalties are seldom sought, this is a clear deterrent to avoiding the voluntary informal clearance process and can present a useful alternative to divestiture orders when a transaction has already proceeded.

There are other avenues that may be pursued by a party that receives an opposition, still has an appetite to proceed but desires comfort before doing so.

  • Apply to the Australian Competition Tribunal to "authorise" the transaction. This process permits an assessment of the transaction on a broader set of criteria – the Tribunal must consider the net public benefit of the transaction when weighed against the anti-competitive detriment. This course was recently adopted by AGL when the ACCC informally opposed its proposed acquisition of Macquarie Generation.2 The outcome is not yet known.
  • Seek a declaration from the Federal Court of Australia that the transaction is not likely to substantially lessen competition and therefore not contravene the Competition and Consumer Act. This course has rarely been taken up but AGL was successful in 2003 in doing so.3

Each of these alternatives is available to a party even if they have not been through the informal clearance process. However, it is uncommon for parties to opt for a far more involved and potentially lengthy process instead of the ACCC informal process unless the circumstances of the transaction are unique.


All is not lost if the ACCC takes a close look at your merger. Mostly, those that are reviewed are cleared. Even the release of a Statement of Issues will not statistically correlate to an adverse final decision by the ACCC. However, a smooth and speedy clearance process is always desirable and demands the dedication of resources and expertise accordingly. Where the release of a Statement of Issues cannot be avoided, the strategy going forward must be carefully managed. Although an adverse decision does not technically close out alternatives, it creates significant deal risk and, where possible, should be contemplated in transaction documentation at the outset.

Norton Rose Fulbright has a market leading Competition and Antitrust practice. Please contact Nick McHugh if you would like to know more about merger clearance issues and the implications for your business.


1Note that in this period 6 confidential merger clearances were opposed, meaning that a Statement of Issues would have been published had the merger been public.

2Application by AGL Energy Limited for merger authorisation – ACT 1 of 2014

3Australian Gas Light Company (ACN 052 167 405) v Australian Competition & Consumer Commission (No 3) [2003] FCA 1525

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

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”

Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions