International Corporate / M&A – Australia

Banki Haddock Fiora is an Australian commercial law firm, based in Sydney, specialising in IP, technology and media law. Though we are a boutique firm in size, we are seen to be leaders in our fields of practice. Many of our partners are regularly named by The Australian Financial Review in its “Best Lawyers in Australia” list and in Doyle’s Guide. Our clients include leading and well-known multinational groups.

Australia is a federation. Australian incorporated companies and foreign companies doing business in Australia are regulated by the Corporations Act 2001, being national legislation of the Commonwealth of Australia. Unlike in the US, companies are not incorporated under the laws of individual Australian states and territories. Companies doing business in Australia are not required to be registered as doing business in a particular Australian state or territory. Companies operating in a particular Australian state or territory must, however, comply with and are regulated by the laws of that state or territory (such as property, indirect tax and environmental laws), as well as applicable laws of the Commonwealth (such as income tax, goods and services tax and fair work employment laws). In the event of any inconsistency between such laws, the laws of the Commonwealth prevail.

Like England and Wales, as well as the US and Canada, Australia and its states and territories are common law, rather than civil law, jurisdictions.
Public companies listed on the Australian Stock Exchange must comply with the ASX Listing Rules, which provide an additional layer of regulation.
The national corporate regulator is the Australian Securities & Investments Commission (ASIC).

Subject to applicable monetary thresholds – including the existence of free trade agreements, or whether a foreign government investor is involved (and which sector a transaction concerns) – acquisitions by foreign persons of interests in Australian land, Australian residential real estate or Australian companies and business are regulated under the Foreign Acquisitions & Takeovers Act 1975, as well as Australia’s foreign investment policy.

In Australia, the last decade has seen the increasing emergence of a significant private market, including for the holding of major assets and large businesses. The listed public company market has – accordingly – diminished, including through sizeable public-to-private transactions, as well as a reduction in the number of IPOs. These changes have been occasioned in part by an increased availability of private capital, a desire among some Australian companies to reduce the regulatory burdens to which they are subjected – but also to not be subject to the price volatilities of a public market affected by factors not tied to the performance or prospects of an individual listed company.

For around 30 years, Australia has operated a large and highly successful compulsory superannuation scheme. Employers of persons in respect of whom compulsory superannuation contributions must be made – comprising most of Australia’s workforce – must make compulsory superannuation contributions, currently at the rate of 11.5% of an employee’s salary. Generally, Australia’s largest superannuation funds are willing to invest in unlisted investments, with more than 20% of such funds invested in unlisted investments.

We act on both sales and acquisitions. A recent example was the sale of an Australian software company operating in a heavily regulated industry across multiple international jurisdictions. This involved preparing the company for sale, consideration of the regulatory regimes in various jurisdictions, setting the conditions precedent accordingly, liaising with overseas counsel in multiple jurisdictions, negotiating the sale and purchase agreement, staged payment obligations (factoring in regulatory approvals some of which were anticipated to take upwards of a year), as well as a novel financing structure and a multi-year earnout structure.

A second recent transaction involved the acquisition of a heavy industry transport business, structured as a business sale rather than a share sale, with multiple contemporaneous and co-dependent property acquisitions involving multiple Australian state jurisdictions. We were involved in due diligence, financing, negotiating the sale and purchase agreement, addressing Australian registered security considerations and stamp duty structuring, as well as asset, contract and property transfers.

We have acted on a number of media business sales and acquisitions, in addition to multiple acquisitions and restructurings for a leading international advertising firm. Moreover, we have acted on multiple management buy-ins, including for multinational groups, with attendant shareholders’ agreements and related employment and loan agreements.

The Australian M&A private market remains strong. The country’s inflation rate remains relatively high when compared to other OECD companies, and so new raisings by Australian companies without strong cash flow and profitability have been challenging. Furthermore, Australia has not been markedly or adversely affected by supply chain issues, as the country has remained strong and stable, being unaffected by political uncertainty or – for around for 80 years – security risks. Similarly, energy pricing issues are not central considerations for the Australian economy, since the region was an early adopter of renewable energy, with such resources in abundance.

We have worked with both large firms and SMEs. Our clients, including substantially sized firms, value the access we provide to partners – combined with our experience, expertise, speed of action, dexterity and, usually, absence of legal or commercial conflicts.

We provide seasoned and well-tailored advice to entrepreneurs so that they may consider the best options that are suitable for them. Businesses, especially in startup mode, cannot be operated risk-free. The better approach is to identify and explain the risk landscape, to identify clients’ risk appetites and to clearly explain the options and manner to address risks consistently with risk appetite.

Our partners participate in global conferences in our areas of speciality, particularly IP, copyright, trademark, media law and defamation law.

Though not yet enacted, the Commonwealth government has introduced legislation into the Commonwealth parliament that provides that, from 1 January 2026, Australia will adopt a mandatory and suspensory administrative merger process for certain acquisitions, such that, if an acquisition reaches a specified monetary threshold and an exemption does not apply, it must be notified to the Australian Competition & Consumer Commission (the ACCC) and cannot be put into effect; otherwise, it will be void.

The ACCC will assess notifiable acquisitions as to whether the acquisition, in all the circumstances, will lead to an effect, or likely effect, of creating, strengthening or entrenching a significant degree of power in a market. The ACCC may determine that an acquisition can be put into effect if it is satisfied that the acquisition will result in public benefits that outweigh any detriment. A stated goal for the merger reform is for 80% of mergers to be cleared within 15 to 20 business days. Acquisitions that are not subject to Australia’s public takeover laws, acquisitions that do not result in a change in control, internal restructures, reorganisations and ordinary business transactions other than those involving land and patents, would not be subject to the new mandatory merger process. Except by prior arrangement, merger clearance applications will be public.

An acquisition will be notifiable if the target has a material connection to Australia, and at least one of the following monetary limits is met:

Limb 1 (large mergers)
a) combined Australian turnover of merger parties (including the acquirer group) is at least AU$200 million; and
b) either: (i) the Australian turnover is at least AU$50 million for each of at least two of the merger parties; or (ii) the global transaction value is at least AU$250 million.

Limb 2 (very large mergers)
a) acquirer group Australian turnover is at least AU$500 million; and
b) the Australian turnover is at least AU$10 million for at least two of the merger parties.

Cumulative thresholds also apply for serial acquisitions over a three-year period.

Should the legislation be passed, transitional arrangements will apply, leading up to the 1 January 2026 commencement date.