ACCC supports proposed 2026 merger law reforms

The Australian Competition and Consumer Commission (ACCC) is on board with the federal government’s decision to strengthen Australia’s merger laws, bringing Australia in line with most other developed economies from 1 January 2026.  

On 10 April 2024, the Albanese government announced new reforms to Australia’s merger laws designed to boost competition and productivity in the Australian economy. 

The reforms in turn are expected to make merger approval systems faster, stronger, simpler, more targeted, and more transparent. 

Companies, including those in the resources industry, undertake mergers and acquisitions (M&As) for a plethora of reasons, including synergy, diversification, economy of scale, faster growth, and basic survival.

They are also used to consolidate mining companies or assets via different types of financial transaction structures, including tender offers, asset purchases, and management buyouts.

Under the reforms, the government says the ACCC will have greater authority and visibility of merger activity and competition issues. A public register of all M&As will also be created. 

The reforms are subject to passage of legislation. 

As part of the reforms, the government seeks to appoint Phillip Williams and Stephen Ridgeway as full-time and part-time associate members of the ACCC, respectively. 

Williams is a former executive chair of Frontier Economics and a former Professor of Law and Economics at the University of Melbourne. He has advised law firms, as well as the ACCC and the National Competition Council, on competition and regulatory issues. 

Ridgeway is a competition and consumer lawyer who joined the ACCC as Commissioner in June 2019 for a five-year term.  

ACCC Chair Gina Cass-Gottlieb says the reforms will benefit Australian consumers and businesses of all sizes, as well as the wider economy.

“Higher prices, less choice and less innovation can result from weakened competition,” Cass-Gottlieb says. 

“Stronger merger laws are critical to ensure anti-competitive mergers do not proceed. These proposed changes are significant and will reinforce public confidence in Australia’s competition laws.”

Notable M&As in the mining industry include Diatreme Resources’ (ASX:DRX) unfolding off-market takeover tilt for fellow ASX-lister silica sand company Metallica Minerals (ASX:MLM). 

If successful, the takeover will create a silica sand company with a pro-forma market capitalisation of about $110 million, with a sizeable resource base. 

More recently, Diatreme obtained a waiver from the ASX in respect of a requirement to obtain approval from its shareholders to acquire Metallica shares held by Ilwella and Sibelco Asia Pacific, as reported by Mining.com.au.  

According to the latest ASX filings, as of march 2024 Sibelco holds a 16.41% interest in Metallica, while Ilwella holds a 24.19% stake. As per Diatreme, Sibelco in February this year delivered its support of the takeover offer, which includes a 50.1% minimum acceptance condition. 

Once acquired, Diatreme will hold 40.6% of all shares in Metallica. As such, Diatreme would only require an additional 9.5% of shares to complete its takeover tilt.

Another was a three-way takeover play concerning Canada’s Silvercorp Metals (TSX:SVM), ASX-listed Perseus Mining (ASX:PRU), and African gold explorer OreCorp (ASX:ORR).

Under the takeover, both Perseus and Silvercorp made offers to acquire sole ownership of OreCorp, as reported by Mining.com.au. 

On 10 April, Silvercorp accepted Perseus’ all-cash offer for OreCorp after the offer from Persues was declared unconditional a few days prior. 

Under Perseus’ offer, shareholders of OreCorp will receive $0.575 per share, an offer which is now regarded best and final. 

Perseus’ offer is set to expire today, 19 April 2024.    

Write to Adam Drought at Mining.com.au

Images: AAP Image/Lukas Coch — ACCC Chair Gina Cass-Gottlieb
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Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.