I OVERVIEW OF M&A ACTIVITY
In terms of public M&A in Australia, 2015 saw fewer but much bigger deals than the previous year – there was a drop of almost 27 per cent in the number of takeover bids and schemes of arrangement above A$25 million compared with the previous year – but a significant increase in the overall deal value.2 Historically low interest rates in Australia and a falling Australian dollar assisted the flow of inbound M&A activity in 2015. In 2015, the value of announced deals increased, reaching US$144.2 billion, which is the highest total since 2011.3 However, equity capital markets declined in 2015 with 87 initial public offerings (IPOs) raising only US$4.7 billion, a 71 per cent decline from the US$16.3 billion raised in 2014.4
Despite significant volatility in commodity prices, transactions in the metals, mining and energy sectors continue to underpin a significant portion of M&A activity in Australia (but to a lesser extent than in previous years). Other ‘hot spots’ of M&A activity are the financial services, real estate, transportation and telecommunications sectors.
Much of the M&A activity in Australia (particularly public M&A) is driven by foreign investment. A falling Australian dollar, and Australia settling the terms of free trade agreements in recent years with major international partners such as Japan, Korea and China, have helped in continuing the flow of foreign investment into Australia.
II GENERAL INTRODUCTION TO THE LEGAL FRAMEWORK FOR M&A
Private M&A transactions are primarily regulated by contract law, which derives from common law and the Competition and Consumer Act 2010 (Cth) (CCA). Other pieces of legislation – including the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA), the Financial Sector (Shareholdings) Act 1998 (Cth) (FSSA), the Insurance Acquisitions and Takeovers Act 1991 (Cth) (IATA) and the Broadcasting Services Act 1991 (Cth) (BSA) – may also be relevant in certain transactions, depending on the nationality of the bidder and the industry in which the target operates.
Public M&A transactions are generally regulated by the Corporations Act 2001 (Cth) (Corporations Act); however, the Listing Rules of the Australian Securities Exchange (ASX), contract law and legislation such as the CCA, the FATA, the FSSA, the IATA and the BSA may also be applicable.
The Corporations Act limits the circumstances in which a person may acquire more than 20 per cent of the ‘voting power’ in a listed company, a listed managed investment scheme or an unlisted company with more than 50 members. The term ‘voting power’ refers to the percentage of voting shares or interests in a company or scheme in which a person or an associate has a ‘relevant interest’. A ‘relevant interest’ is, in broad terms, a power to exercise or control the exercise of a right to vote, or a power to dispose of or control the exercise of a power to dispose of shares or interests.
The Corporations Act contains several pathways and exceptions allowing a person to acquire more than 20 per cent, the two most common of which for the purposes of effecting a change of control are off-market takeover bids and schemes of arrangement.
i Takeover bids
In an off-market takeover bid, the bidder prepares a bidder’s statement (which contains the terms of the takeover offer) and the target prepares a target’s statement (which contains the target directors’ recommendation and, in certain circumstances, an independent expert’s report). The terms of takeover offers are often simpler than private M&A sale and purchase agreements. In particular, takeover offers generally do not have the kinds of purchaser protection provisions seen in private M&A transactions (such as warranties and deferred purchase price arrangements).
A bidder may compulsorily acquire any remaining target shares after a takeover if the bidder and its associates have relevant interests in at least 90 per cent of target shares, and have acquired 75 per cent by number of the target shares bid for under the takeover.
In addition to the 20 per cent prohibition, the takeover provisions of the Corporations Act also contain certain obligations and restrictions on persons making a takeover bid:
- a no collateral benefits: a bidder cannot give target shareholders or their associates any benefit if the benefit is likely to induce acceptance of the takeover and is not offered to all target shareholders;
- b minimum price: the consideration offered under a takeover must equal or exceed the maximum consideration that the bidder provided for target shares in the four months before the takeover bid;
- c conditions: takeover bids can be subject to a variety of ‘defeating conditions’ (e.g., obtaining a minimum percentage of acceptances), but cannot be subject to certain conditions, including a maximum acceptance condition or a condition the satisfaction of which is solely within the control of the bidder; and
- d disclosure of intention to bid: unlike the United Kingdom, Australia does not have a ‘put up or shut up’ rule. However, if a person announces a public proposal to make a takeover bid, they must then make a takeover bid within two months of making the proposal on terms no less favourable than those announced.
Takeover bids are also regulated by Australia’s corporate regulator, the Australian Securities and Investments Commission (ASIC) and the Takeovers Panel (Panel). The Panel is the primary dispute resolution forum during a takeover bid. Only government entities may commence court proceedings in relation to a takeover bid, or a proposed takeover bid, before the end of the bid period.
ii Schemes of arrangement
A ‘scheme of arrangement’ is a statutory contract between the target company and its shareholders.
Scheme meetings of target shareholders are convened by a court order. After shareholders approve the scheme by the requisite majorities (75 per cent of the votes cast on the scheme resolution, and 50 per cent of the number of the shareholders present and voting (in person or by proxy) at the scheme meeting), the court is asked to grant orders to implement the scheme. As part of the approval process, ASIC reviews the scheme documents and, if satisfied with them, gives a ‘no objection’ statement to the court.
Once a scheme is approved by shareholders in a general meeting and approved by the court, it is binding on all shareholders of the company. To acquire 100 per cent ownership, a bidder under a takeover bid needs to acquire control over 90 per cent of the shares on issue and to acquire 75 per cent of the shares bid for. In a scheme, in general terms, the test is potentially easier: 100 per cent ownership can be achieved if the scheme is supported by a majority in number of shareholders holding not less than 75 per cent of the shares voted at a meeting.
As a scheme is an arrangement that must be put to shareholders by the target board, it must by its nature be a recommended transaction and so is not suitable for hostile acquisitions.
III DEVELOPMENTS IN CORPORATE AND TAKEOVER LAW AND THEIR IMPACT
On the private M&A front, in the past few years we have observed a trend towards US-style material adverse change conditions favouring buyers; the use of ‘locked box’ pricing provisions, particularly where private equity buyers or sellers are involved (although completion adjustments remain the more common pricing mechanism); and the continued use of warranty and indemnity insurance.5
There have been a number of high-profile competitive sales processes in financial services and infrastructure in the past year, including ANZ’s sale of the Esanda dealer finance business, GE’s sale of both its Australian consumer and commercial finance businesses, the NSW government’s sale of StatePlus (a financial planning business for a NSW state super fund), the privatisation of the NSW transmission grid and the sale of the Port of Darwin. Some of these have been conducted as ‘dual track’ processes where the seller compares the value of an IPO of the sale company against the value of a trade sale. While we have seen a general trend towards quite buyer-friendly private M&A provisions, clearly this changes in a competitive process where a seller has more leverage. One area of particular concern for sellers is addressing completion risk where an acquisition is subject to regulatory approvals, and we have seen examples of ‘reverse break fees’ offered by buyers to address concerns around obtaining overseas regulatory approvals and competition clearances.
In the public M&A arena, there has been no legislative change over the past few years in relation to schemes of arrangement – developments in this area have tended to arise as a result of judgments in schemes hearings. Similarly, there has been very little legislative change governing takeover bids, although Takeovers Panel decisions have provided a platform for developments in this field. In June 2015, the Federal Court handed down its decision in ASIC v. Mariner Corporation Limited,6 which related to Section 631(2)(b) of the Corporations Act 2001.7 The Court took a strict legislative view of the wording of this Section (focusing on a standard of ‘recklessness’) that differs in certain respects from the Panel’s guidance relating to funding arrangements for takeover bids. The Panel guidance focuses on whether a bidder has a reasonable basis to expect that it will have funding in place to pay for all acceptances when its takeover bid becomes unconditional. Given the Court’s stricter interpretation of the relevant Section, the Panel has noted that it intends to consult on proposed changes to Guidance Note 14 (Funding arrangements).8
IV FOREIGN INVOLVEMENT IN M&A TRANSACTIONS
Foreign investment in Australia is regulated by the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA), the Foreign Acquisition and Takeovers Regulations 2015 (Cth) (FATR), the Foreign Acquisitions and Takeovers Fees Imposition Act 2015 (Cth), the Foreign Acquisitions and Takeovers Fees Imposition Regulation 2015 (Cth), the Register of Foreign Ownership of Agricultural Land Act 2015 (Cth), the Register of Foreign Ownership of Agricultural Land Rule 2015 (Cth) and Australia’s Foreign Investment Policy (Policy).
In 2015, the government introduced changes to Australia’s foreign investment regime. While the new legislation represents the most substantive changes to the framework since its introduction, most changes (other than the changes to agribusiness) clarify rather than radically change the law.
Under this regime, the Foreign Investment Review Board (FIRB) must be notified of ‘foreign persons’9 acquiring a substantial interest (20 per cent or more) in a corporation or acquiring control of an Australian business valued above A$252 million. For investors from certain countries that are party to bilateral trade agreements with Australia, this threshold applies only to investments in certain prescribed sensitive businesses, and a A$1.094 billion threshold applies otherwise.10 FIRB must be notified of all direct investments by foreign governments and their related entities irrespective of the value of the investment, including starting a new business or acquiring an interest in Australian urban land. Specific rules apply for the acquisition of direct interests11 in an agribusiness. An Australian entity will be considered an ‘agribusiness’ where the value of the assets used to carry on the agribusiness or the earnings before interest and tax of the entity derived from the agribusiness exceed 25 per cent of the total business assets or earnings. Agribusiness is defined broadly, and includes agriculture, forestry and fishery businesses and certain first stage downstream manufacturing and processing businesses.
Under FATA, the Federal Treasurer examines investment proposals, and may block proposals or apply implementation conditions where the proposal is considered to be contrary to the ‘national interest’. The Treasurer is advised by FIRB, a non-statutory board within the Commonwealth Treasury that is responsible for the day-to-day administration of Australia’s foreign investment regime. The broad criteria for the ‘national interest’ test are deliberately not enshrined in FATA to ensure that the test is interpreted and applied in a flexible manner. Under the Policy, the Treasurer will consider a range of factors, and the relative importance of these can vary depending upon the nature of the target enterprise.12
Since 2014, Australia has entered into or furthered a series of bilateral free trade agreements with key trading partners including China, Korea and Japan. In 2015, the Australian Treasurer earmarked more than A$50 million for promotional activities designed to increase Australia’s profile as an international investment destination and promote opportunities in five priority sectors in the 2015 Federal Budget.13
Chinese investment has been a key focus of government policy on foreign investment, with the federal government concluding negotiations on the China–Australia Foreign Trade Agreement (CHAFTA) in November 2014 (CHAFTA entered into force on 20 December 2015). CHAFTA represents a significant move in securing stronger investment and trade ties with Australia’s most significant trading partner. As well as removing tariffs on agricultural and other exports, and improving Chinese market access in the services sector, CHAFTA aims to make Australia a more attractive destination for Chinese investment by lifting the screening threshold for private Chinese investments in non-sensitive sectors, including media, telecommunications and defence-related industries. Investment by Chinese state-owned enterprises in Australia remains sensitive and will continue to be screened by FIRB, regardless of the transaction size; however, a low Australian dollar and CHAFTA should result in greater inbound Chinese investment.
In a rare instance of a rejection under the foreign investment regime, in 2013 the Treasurer rejected Archer Daniels Midland’s proposed acquisition of Australian grain trader GrainCorp. Foreign investment in agriculture remains an area of political sensitivity, and reductions have been made to screening thresholds for agricultural land and agricultural businesses, opening a greater number of proposed acquisitions to FIRB review.14 On 1 July 2015, the federal government also established a foreign ownership register of agricultural land to strengthen reporting requirements and generate a clearer picture of foreign investment in this area.
V SIGNIFICANT TRANSACTIONS, KEY TRENDS AND HOT INDUSTRIES
Over the past five years we have seen a trend towards more recommended deals in public M&A, whether by way of schemes of arrangement (which by their nature must be recommended) or recommended takeover bids. Truly hostile takeovers are becoming increasingly rare.
A bidder looking to acquire 100 per cent of an Australian publicly listed target will, almost as a necessity, require a target board recommendation to achieve its goal. The Corrs M&A Year in Review (which analyses all deals involving an Australian listed target valued at over A$25 million) shows that in the past five years, not one bidder has reached 100 per cent without a target board recommendation.15
Bidders are increasingly reluctant to proceed with a control transaction without first obtaining due diligence access, which requires engagement with the target.
‘Hostile’ takeovers have become a less common practice in Australia. Instead, we are seeing an increase in bidders preferring to test the water with indicative approaches to target boards rather than committing to a takeover without a recommendation.
Private equity purchases made up a relatively small portion of bidders in public deals in 2015. However, this was not entirely reflective of private equity interest in public M&A targets, as the figures did not take into account approaches made by private equity houses that did not ultimately culminate in an announced transaction – including, for example, US private equity firm Providence Equity Partner’s indicative proposal for iSelect.com.au and CHAMP Private Equity’s consortium approach (with Sigdo Koppers) for Bradken Limited.
The financial services sector again generated some of the largest private M&A transactions in 2015–2016 with the approximately A$8.2 billion sale of GE Capital’s Australian and New Zealand commercial finance business to KKR, Varde Partners and Deutsche Bank in March 2015;16 ANZ’s sale of the Esanda dealer finance business for A$8.2 billion to Macquarie Capital;17 and SAS Trustee Corporations sale of StatePlus (conducted by way of a dual track process) to First State Super for approximately A$1 billion.18
The Australian real estate sector continued to attract interest in 2015–2016, with renewed takeover activity and speculation in Australian real estate investment trusts (A-REITs). The Australian real estate sector opened strongly in 2015, with early proposals for the Novian Property Group and Australian Industrial REIT (Real Estate Investment Trust), both of which were ultimately successful and ended with the A$2.5 billion proposal by Dexus for the Investa Office Fund, which resulted in several court proceedings and Takeover Panel applications and which was ultimately voted down. In 2016, we expect to see continued interest from Asian buyers and sovereign wealth and pension funds looking to buy into the Australian property market. It may be that some of the smaller and more specialist REITS (e.g., hotels, healthcare, education and childcare, and storage facilities) will be targets for consolidation. We expect that local REITS will also be looking at M&A as an opportunity for growth in an increasingly competitive internal and external environment.
VI FINANCING OF M&A: MAIN SOURCES AND DEVELOPMENTS
There continues to be significant appetite among Australian domestic banks, investment banks, non-bank lenders (including Australian superannuation funds) and others to support Australian M&A. This combination of competing financing sources has led to borrowers being able to achieve very favourable loan terms, although it remains to be seen if this will be maintained given some upward pressure on bank funding costs. Financial sponsors are continuing to run very competitive funding competitions to line up acquisition finance packages to support their bids, and the past year has seen significant continuing activity from global private equity firms in bidding for Australian assets. We expect this trend to continue, as US private equity firms look to deploy capital offshore given the strong competition that they are currently facing from strategic buyers in the US M&A market.
VII EMPLOYMENT LAW
The Fair Work Act 2009 (Cth) (FW Act) is the primary piece of legislation governing employment in Australia. It applies to most employees in Australia other than certain state public sector employees. The legislation establishes a number of instruments that determine the terms and conditions of employment for employees. These include modern awards and enterprise agreements that are specific enterprise agreements negotiated to apply at a site. Enterprise agreements are collective instruments governing the terms and conditions of a particular workforce, which are given statutory force under the FW Act.
In a transactional context, the FW Act contains rules that impose obligations on the parties when there is a ‘transfer of business’, such as when there is a transfer of assets from one employer to another. There is, however, no obligation or presumption that the new employer must take on the seller’s workforce unless it wishes to. Generally speaking, if there is a transfer of business, the industrial instruments (enterprise agreements) that applied to an employee who transfers his or her employment will continue to apply to the employee and bind the new employer, subject to any contrary order from the Fair Work Commission (FWC), which can be sought on application by an employer, employee or union. The new employer may also be required to recognise the continuous service and leave entitlements the employee accrued while working for the old employer. The value of these potentially transferrable entitlements is likely to be significantly higher in the Australian context than in other markets due to the nature of those employee protections. For example, Australian employees will have accrued four weeks’ paid annual leave (vacation) per year, which accrues from year to year, and may have long service leave (paid sabbatical) entitlements that are also transferrable.
In the context of a merger or acquisition, potential liability for redundancy pay in connection with a transfer of employment from the old to new enterprise also arises. Redundancy pay will generally not be payable where the employer obtains acceptable alternative employment for the workforce. This was recently illustrated by a FWC decision in the contract services industry,19 where a government department cancelled large-scale services engagements with one provider, and engaged a new operator after a tender process. The workforce of the old employer transferred to that new provider following a recruitment process supported by the old employer; however, there was no agreement that the employees would be offered roles, and that they would need to compete on merit with outside candidates. In those circumstances, the FWC found the former employer had not done enough to obtain employment for those employees, and that therefore they were due redundancy pay for the loss of employment.
VIII TAX LAW
In the usual life cycle of an Australian investment, tax issues arise during the acquisition process, during the ownership period and upon exit of the investment for a foreign investor.
At the time of acquisition, stamp duty can be a significant transaction cost for buyers, particularly in asset transactions and acquisitions of Australian entities with real estate or mining assets. Each Australian state and territory imposes stamp duty, most commonly at a rate of approximately 5.5 per cent of the gross value of assets acquired.
During the ownership period, the repatriation of profit is affected by the Australian imputation system for the taxation of dividends. If a dividend is paid by an Australian company to a foreign resident investor from taxed profits (‘franked’ dividend), there is no withholding tax. If the dividend is paid out of untaxed profits (‘unfranked’ dividend) to a foreign resident investor, withholding tax applies at a rate of up to 30 per cent (although the rate usually is significantly lower if the foreigner is resident in a country with which Australia has a double tax treaty). Interest payments by an Australian company on related party debt are subject to withholding tax at a rate of 10 per cent.
An exit from an investment can give rise to complicated tax issues. In general, for an investment in an Australian entity that does not have more than 50 per cent of its (gross) asset value in real estate or mining assets, tax should not be payable on the profits of a foreign investor that is resident in a country with which Australia has a double tax treaty. Otherwise, whether the profit is taxable or not depends on the imprecise test of whether a profit is of a ‘revenue’ (taxable) or ‘capital’ (not taxable) character.
For an Australian entity with the majority of its (gross) asset value in real estate or mining assets, a profit derived on an ownership interest of 10 per cent or more in an Australian entity will be taxable. The purchaser of an asset from such a foreign resident must withhold 10 per cent of the (gross) purchase price.
The tax rate for a foreign resident corporate investor is 30 per cent (which is the same general rate as for Australian corporations).
i Developments affecting M&A transactions
The structure for an investment into Australia was the subject of a long-running tax dispute that concluded in late 2014 involving the mining-focused private equity firm, Resource Capital Funds (RCF). In the case, the Full Federal Court upheld the Commissioner of Taxation’s determination that a profit on exit from an Australian mining company was taxable in Australia because the investment vehicle used by the particular RCF fund was a Cayman Islands LP that was not a resident of any country with which Australia has a double tax treaty. The profit was taxed in Australia notwithstanding that most underlying investors were resident in the United States (a treaty country) and that the Commissioner has published a public ruling supporting a ‘look through’ to the underlying treaty resident investors of a non-treaty resident transparent investment vehicle. The case was also complicated by the fact that the target company’s value was attributable to mining assets, with the effect that the profit may have been taxable regardless of the country of residence of the investor. The result of the case emphasises the need to consider carefully the investment structure into Australia.
Australia’s thin capitalisation rules (which restrict deductibility of interest on debt) generally require a ratio of no more than 1.5 (debt): 1 (equity) (previously the ratio was 3:1). The test means that generally a foreign-owned Australian entity can finance its assets and operations with 60 per cent debt funding.
Under the new requirement for FIRB approval, foreign investors acquiring an Australian owned or listed company can be required to address the tax consequences of their proposal with FIRB and give binding commitments about access by disclosure of information to the Australian Tax Office, given tax concerns raised in some high-profile M&A transactions in recent years, and the broader debate playing out in Australia and other countries about base erosion and profit shifting.
IX COMPETITION LAW
Competition merger control in Australia is governed by the Competition and Consumer Act 2010 (Cth) (CCA). The CCA prohibits mergers or acquisitions of shares or assets that have the effect or likely effect of substantially lessening competition in a market.20 The CCA is administered by the Australian Competition and Consumer Commission (ACCC).
There is no mandatory pre-merger notification process in Australia. However, given the ACCC’s significant investigative and enforcement powers, it is common for transactions to be notified to the ACCC voluntarily and for ACCC clearance to be obtained prior to completion.
The ACCC’s Merger Guidelines encourage the notification of acquisitions that would result in the acquirer having a market share of 20 per cent or more in an Australian market, and where the products supplied by the parties to the merger are substitutes or complements. However, this is not a ‘bright line’ threshold, and the ACCC may investigate (and in appropriate cases merger parties may choose to notify the ACCC of) mergers where the acquirer’s market share is less than 20 per cent, particularly if the acquisition is in an industry that has received significant ACCC focus or where the acquisition may raise potential market complaints or ACCC interest.
Parties may seek ‘informal’ (i.e., non-statutory) or formal clearance from the ACCC for an acquisition, or apply to the Australian Competition Tribunal (ACT)21 for authorisation of an acquisition (the ACT can authorise a merger if it would result, or would be likely to result, in public benefits such that it should be permitted).22 Informal clearance generally takes between two weeks and six months to obtain, depending on an acquisition’s complexity or contentiousness, or both. If obtained, informal clearance results in the ACCC providing a letter of comfort to the parties, stating that it does not intend to oppose the acquisition based on the information it has considered regarding the likely effect of the merger on competition.
The informal clearance process includes an initial two to four week ‘pre-assessment’ phase in which the ACCC may decide it can relatively quickly clear an acquisition on a confidential basis and without a public review. In practice, many transactions notified to the ACCC are cleared in this way. If the ACCC is unwilling to clear an acquisition at the pre-assessment phase, it will undertake a first-phase public review of between six to 12 weeks, and possibly a second-phase review of a further six to 12 weeks.
To date, almost all applications for merger clearance in Australia have been made by way of the informal clearance process.
However, in recent years a trend of bypassing the ACCC’s informal clearance process – by seeking authorisation from the ACT – has emerged. In 2014, Murray Goulburn went directly to the ACT in relation to its (ultimately abandoned) proposal to acquire Warrnambool Cheese & Butter. That was quickly followed by a successful application to the ACT by AGL in relation to its acquisition of Macquarie Generation, and a now-withdrawn application by Sea Swift for its proposed acquisition of Toll Marine Logistics.
In this context, an important recent development has been the release of the government’s response to a recommendation by an independent review panel to combine and streamline the ACCC formal clearance and ACT authorisation processes. Broadly, the government supports that recommendation and proposes to introduce legislation for a new authorisation process under which the ACCC, and not the ACT, would be the first-instance decision-maker, with the ACCC’s decisions appealable to the ACT.
Further, as also recommended by the review panel, the government proposes to introduce a system of post-merger evaluations, aimed at assessing the correctness of past ACCC merger decisions, to be conducted by a new Australian Council for Competition Policy.
X OUTLOOK FOR M&A IN AUSTRALIA
Australia was initially isolated from the worst of the global financial crisis because of a mining boom – a boom that is now nearing its end. Over the past year, reversals in the price of iron ore, coal, oil and gas have affected confidence in the Australian economy. The volatility of elections at the state and federal level has created some uncertainty. In these circumstances, the Australian M&A market can be considered to be performing well, but with the potential of much more on the upside.
The bright spots in the M&A outlook currently are industry-specific, with stronger activity in depressed sectors such as mining, oil and gas, and related areas such as services, engineering, transport and logistics. Much of this activity is driven by a need to rationalise costs and curtail capital expenditure. Agriculture continues to be an area of opportunity and of nationally significant possibility, but investment in agriculture is hampered by sensitivity at a political level, particularly in the area of foreign investment.
Demergers are popular as an area for focus and growth, reflecting fewer opportunities in public company M&A. Demergers, although counterintuitive because of the immediate disruption involved in separating business divisions, continue to perform well in the equity markets, rewarding both management and shareholders.
We have seen 2016 start with China’s currency weakening, oil prices plummeting and the ASX having its worst ever start. While each of these has the potential to negatively affect the public M&A market, it is how these factors may plague general corporate confidence that could really have an impact on dealmaking. With this continued uncertainty, it is likely that investment sentiment in 2016 will remain cautious.
1 Braddon Jolley, Sandy Mak and Jaclyn Riley-Smith are partners at Corrs Chambers Westgarth. The authors have been assisted in the preparation of this chapter by Lizzie Knight, Simon Reid, Jack de Flamingh, Mark McCowan and Craig Milner.
2 ‘2015 M&A Year in Review’, Corrs Chambers Westgarth, March 2016.
3 ‘Mergers & Acquisitions Review’, Thomson Reuters, full year 2015.
4 EY Global IPO Trends Q4 2015, Ernst & Young.
5 ‘Deal points in Private M&A Sale Agreements’, Corrs Chambers Westgarth, 2015.
6  FCA 589.
7 This Section prohibits a person from publicly proposing a takeover bid if the person is reckless as to whether he or she will be able to perform his or her obligations relating to the takeover bid if a substantial proportion of the offers under the bid are accepted.
8 Takeovers Panel Annual Report 2014–2015.
9 Under Section 4 of of the FATA, a ‘foreign person’ means an individual not ordinarily resident in Australia; a corporation in which an individual not ordinarily resident in Australia, a foreign corporation (together with any associates) or a foreign government investor holds at least a 20 per cent controlling interest; a corporation in which two or more persons, each of whom is an individual not ordinarily resident in Australia, a foreign corporation (together with any associates) or a foreign government investor holds at least a 40 per cent aggregate controlling interest; the trustee of a trust estate, in which an individual not ordinarily resident in Australia, a foreign corporation (together with any associates) or a foreign government investor holds a beneficial interest in at least 20 per cent of the corpus or income of the trust estate; or the trustee of a trust estate in which two or more persons, each of whom is an individual not ordinarily resident in Australia, a foreign corporation (together with any associates) or a foreign government holds a beneficial interests in at least 40 per cent of the corpus or income of the trust estate.
10 These countries include New Zealand, the United States, Chile, Japan, China and South Korea. Prescribed ‘sensitive businesses’ include the media sector; telecommunications; transport; defence and military-related industries and activities; encryption and securities technologies and communications systems; or the extraction of uranium and plutonium or the operation of nuclear facilities, upon which additional requirements or limits on foreign investment are imposed by separate legislation.
11 Under Section 16 of the FATR, a ‘direct interest’ means an interest of 10 per cent, or 5 per cent if the person has a legal arrangement with the entity (e.g., an off-take agreement); or the acquisition of any interest if the foreign person is in a position to participate or influence the central management and control of the company, or influence, participate in or determine the policy of the company.
12 Department of Treasury, ‘Australia’s Foreign Investment Policy’, December 2015. The guidelines are available on FIRB’s website www.firb.gov.au, page 7.
13 Office of the Minister for Trade and Investment, ‘$53 million to attract vital new investment to create jobs’ (media release, 12 May 2015).
14 As of 1 March 2015, the screening threshold for agricultural land was lowered from A$252 million to A$15 million (cumulative), and an A$55 million threshold for investments in agribusiness was introduced to capture downstream activities with links to primary production.
15 ‘2015 M&A Year in Review’, Corrs Chambers Westgarth, March 2016.
16 ‘Värde Partners, KKR and Deutsche Bank Consortium Purchase GE Capital’s Consumer Finance Business in Australia and New Zealand’, GE Newsroom, 15 March 2015, www.genewsroom.com/press-releases/v%C3%A4rde-partners-kkr-and-deutsche-bank-consortium-purchase-ge-capital%E2%80%99s-consumer.
17 Australian Financial Review, ‘Macquarie buys ANZ’s Esanda Dealer Finance unit for $8.2b’, 8 October 2015, www.afr.com/business/banking-and-finance/macquarie-buys-anzs-esanda-dealer-finance-unit-for-82b-20151008-gk462w.
18 Australian Financial Review, ‘Why First State Super was never going to miss StatePlus’, 23 May 2015, www.afr.com/street-talk/normality-restored-as-stateplus-1b-auction-goes-full-circle-20160522-gp183u.
19 Serco Sodexo Defence Services  FWC 641.
20 Section 50 of the CCA.
21 The ACT is a specialist administrative tribunal comprising a judge of the Federal Court of Australia, an economist and a businessperson.
22 Under Section 95AT of the CCA.