Streamlined approvals may speed process for smaller, straightforward M&As

Monday 8th June 2009

The Commerce Commission is offering a streamlined approval process for mergers and acquisitions, with straightforward transactions involving smaller companies or markets the most likely beneficiaries.

Proposals that qualify for speedy consideration by the regulator would get a draft determination within 20 working days and a final ruling within 40, according to guidelines published on the Commerce Commission’s website.

“The streamlined process will allow businesses to make more timely and cost-effective decisions,” the regulator’s director of competition, Deborah Battell, said in a statement. While the Commerce Act prohibits acquisitions or practices that erode competition, consumers or the economy, the commission can grant authorizations where public benefits outweigh the anti-competitive effects.

Those most likely to qualify are transactions affecting only a small number of markets or parties, and where there is broad consensus favouring the arrangement and the benefits are obvious without the need for complex quantitative analysis, the regulator’s guidelines said.

Markets smaller than $20 million or involving businesses employing 19 or fewer people are more likely to be candidates.

Bigger deals, or those involving companies with at least 70% share of their market are unlikely to be streamlined, as are transactions that involve a conference of affected parties to be called, where confidentiality is requested or the commissions must use its statutory information-gathering powers.

To view the guidelines and related information in full, click here.

Businesswire.co.nz

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