Are merger authorisations now practical? Competition Tribunal takes first merger authorisation decision under the current merger authorisation procedure

To date, most merger clearances in Australia have involved a voluntary application for 'informal clearance' to the Australian Competition and Consumer Commission (the ACCC). The option of applying directly to the Australian Competition Tribunal (the Tribunal) for a merger authorisation has always existed, but has generally been regarded as impractical within the dynamic commercial context of M&A transactions.

However, on 25 June 2014, the Tribunal granted conditional authorisation for AGL Energy Limited's (AGL) high-profile Aus$1.5bn acquisition of the assets of Macquarie Generation (MacGen).1 The decision is the first merger authorisation decision under the current merger authorisation procedure. The decision illustrates that merger authorisation is a practical alternative for certain M&A transactions.