Market Concerns Grow Over Merger Law Reform — Capital Brief

Competition lawyers and investors have called for greater clarity on sweeping changes to Australian merger law that aim to introduce extra layers of scrutiny into private equity deals and venture capital investments in startups.

A week before the deadline for consultations on the planned changes, market participants say they are still in the dark about key aspects of the proposals, which they believe could indirectly limit VC investments in startups and make it more difficult to execute roll-up transactions involving private capital.

The changes are designed to force more companies to notify the Australian Competition and Consumer Commission (ACCC) of their deal plans and crack down on “creeping takeovers” – two issues that have frustrated the regulator in recent years due to the rise of big tech companies and a voluntary system that it says allows too many mergers to escape scrutiny.

Rampersand VC Partner Paul Naftali he said Brief description of capital that in its current form the current proposals are a “fishing net that catches dolphins (and) has not been sufficiently thought through”.

“We know that reform is needed. We know that the oligopolistic or monopolistic environment in Australia is not good for competition or for consumers, and that includes the big cities,” Naphtali said.