The relevance of import competition to merger assessment in Australia

The Australian Competition and Consumer Commission has been criticised for failing to take due account of the impact import competition has on domestic firms when assessing whether or not a proposed merger will be likely to substantially lessen competition. This article reviews the approach taken by the ACCC to import competition in its merger assessments. Consideration is given to both the policy adopted by the ACCC and the statistical relevance that has, in fact, been placed on import competition in merger assessment. A conclusion is then drawn as to the appropriateness of the ACCC's current policy and practice.

The Australian union merger wave revisited

What factors explain the Australian trade union merger wave between 1991 and 1994? Existing explanations largely attribute it to the pro –amalgamation policy of the Australian Council of Trade Unions (ACTU)and other union leaders,and to declining union membership and decentralised bargaining. This paper reviews discussion of the causes of mergers and publicly available evidence upon them. It concludes that current explanations of the merger wave are an over–simplification. The effects of ACTU leadership, official union policy,and members' views are complex and not uniform and require more disaggregated analysis. Also,there has been a tendency to overstate the importance of membership decline and decentralised bargaining and to over – look other environmental factors such as changing occupational structure. The paper cautions against the assumption that variables influencing ACTU policy also shape affiate actions.

The Dawson report and merger regulation

Discusses the Review of the Competition Law Provisions of the Trade Practices Act recommended by the Dawson Committee in Australia. Prohibition of mergers that lessens market competition by Trade Practices Act 1974; Requirement for a request of informal clearance; Establishment of an optional formal clearance procedure; Submission of merger authorization requests to the Australian Competition Tribunal.

Multi-jurisdictional merger review procedures - a better way

Corporate mergers whose effects transcend national borders have faced increasing regulation over the past few decades as more jurisdictions have developed merger laws and imposed pre-merger notification requirements. The level of regulatory response to multi-jurisdictional mergers is likely to continue to increase as even more jurisdictions contemplate the introduction of competition laws. This level of regulation now goes beyond that required to protect national economies from potentially harmful mergers and has seen burgeoning costs to business, regulators and, ultimately, the public. In recognition of this, the relatively newly formed International Competition Network has placed merger regulation at the forefront of its agenda for greater harmonisation and cooperation in competition law. This has seen, over the past three years, the development of a set of guiding principles and recommended practices for merger notification procedures designed to reduce the regulatory burden. This article evaluates these recommendations and discusses areas for further reform.

Merger announcements and insider trading activity in India: an empirical investigation

Insider trading activity is investigated prior to merger announcement in Indian capital market. An attempt is made to check it out whether trading takes place on the basis of asymmetric and private information. For examining the behaviour of stock prices a modified market model is used to estimate the parameters for the estimation window. These estimates are used to compute average return and cumulative average returns for the event window, which are measures of abnormal returns. Besides price run-ups, it is also common to see unusually high levels of share trading volume before public announcement of merger. Daily trading volume pattern of the target companies is also investigated. The analysis carried out in this study is based on a sample of 42 companies for which merger announcement date was announced during the period of 1996-1999. Based on the analysis for each company individually, we recommend investigation in six companies for existence of possible insider trading.

Proposed changes to merger regulation in Australia

The way in which mergers are evaluated in Australia is set to undergo significant change in the coming year. The Review of the Competition Law Provisions of the Trade Practices Act (the Dawson Review) was released by the Government in April.1 While recommending the retention of the current substantial lessening of competition test, the Dawson Committee made a number of recommendations for change regarding the procedures to be applied in assessing potential mergers. These recommendations have received the support of the federal Government. This paper will critically discuss the recommendations of the Committee in light of the submissions made to the Review and will also consider the possible amendments to the TPA that may flow.

An investigation into the drivers of Australian REIT merger and acquisition announcements

Purpose – The purpose of this paper is to use Australian Real Estate Investment Trust (A-REIT) data to empirically examine potential influencing factors on A-REITs becoming a bidder or a target in the mergers and acquisitions (M&A) area.

Design/methodology/approach – This study uses logistic regression analysis to investigate the odds of publically traded A-REITs being either a bidder or a target as a function of a number of financial and corporate governance variables.

Findings – Prior research in the US REIT M&A area has shown that target size is inversely related to takeover likelihood; in contrast, the authors’ Australian results show that size has a positive impact. Prior research on share price and asset performance has shown that underperformance increases the odds of an entity becoming a target, but this paper’s results further support these findings and provide confirmation of the inefficient management hypothesis. For acquirers it was found that leverage, cash balances, management structure, the level of shares held by related parties and the global financial crisis have an important impact on bidder likelihood.

Practical implications – Given that the literature suggests that investors can earn significant positive abnormal returns by owning targets, but incur significant abnormal losses by owning bidders, at announcement, this study will be useful to fund managers and other investors in A-REITs by investigating the characteristics of those firms that become targets and bidders.

Originality/value – This paper adds to the recent US REIT M&A literature by examining the second biggest REIT market in the world and reporting a number of factors that might influence A-REITs to become targets or bidders.

The effect of victim age on police authorisation of charges in cases of child sexual abuse

In the study, a cohort of 440 child sexual abuse cases were used to model the effect of victim age on police authorisation of charges. Linear and quadratic effects of age were modelled in a logistic regression that controlled for case characteristics and evidence. The quadratic effect of victim age was strengthened when control variables were included in the model and the linear effect of age was not significant in the final model. The results indicated that cases involving victims in middle childhood had a higher proportion of suspects charged than cases involving victims in early childhood and adolescence. Possible mediators of the relationship between victim age and charges were explored and it was found that cases with older victims had a higher prevalence of extra-familial abuse and suspect confessions, and these factors had a positive effect on the proportion of suspects charged. Possible explanations for the quadratic effect of victim age and mediation are discussed.

Current issues in merger law

This collection of global perspectives will be of great interest to scholars and students of competition law, microeconomics, and regulatory studies.     This collection of global perspectives will be of great interest to scholars and students of competition law, microeconomics, and regulatory studies.
The globalization of markets, combined with the extraordinary expansion of merger control laws over the past two decades, has resulted in an increasing number of mergers inviting multiple regulatory responses. This has had a significant impact on the complexity, time and cost associated with transnational mergers and has highlighted the differences in law, policy and procedure employed by more than 70 jurisdictions now adopting targeted merger regimes. By contrast with other areas of competition law and policy, the treatment of mergers involves a significant regulatory component, with most jurisdictions adopting ex ante notification and suspension obligations for mergers exceeding defined thresholds. The justification for this lies in the structural change to the market affected by the merging of assets, personnel and intellectual property, which are difficult to reverse. However, ex ante regulation also has the consequence of subjecting the vast majority of benign or beneficial mergers to the cost and delay associated with administrative scrutiny. This cost and delay has the potential to jeopardize time-sensitive transactions or postpone expected efficiency gains. Where markets extend beyond domestic borders, these costs are multiplied and the slowest and most prescriptive jurisdiction will influence or determine the time at which the merger can close, if at all, and on what conditions.                 

Long-Term post-merger announcement performance. A case study of Australian listed real estate

This study examines the long-term postmerger performance of Australian Real Estate Investment Trusts (A-REITs). The A-REIT sector is used as a case study being less vulnerable to agency issues due to its regulatory structure (Eichholtz and Kok, 2008; Ratcliffe et al., 2009). Research on conventional firms has shown, on average, shareholders are worse off in the long run (Alexandridis et al., 2012). In contrast, we find that shareholders experience significantly positive abnormal returns, after accounting for the financial crisis. This outcome suggests that when managers are restricted with the use of retained earnings and the type of investment, they may be less susceptible to hubris and/or agency issues.

Police and prosecutors' perceptions of adult sexual assault evidence associated with case authorisation and conviction

This study examined the association between the quality of verbal evidence in cases of sexual assault reported by adults and professionals’ (police and prosecutor) ratings of the likelihood that the cases will result in a conviction at trial. Sixteen police detectives and 19 prosecutors (all specialists in sexual assault) each read two mock sexual offence briefs of evidence, one of a case involving rape of an adult and the other involving an adult reporting historical child sexual abuse. For each case type, two versions of the briefs were developed with regard to evidence quality, which varied according to the degree of elaboration in the responses by the witnesses and suspect, and contextual evidence. Participants rated the likelihood of proceeding with a case and conviction (on 10-point likert scales) and provided a rationale for their decisions. Almost all of the participants agreed that the cases would proceed to court. However, the likelihood of conviction was not associated with the likelihood of proceeding to court, or the evidence quality of the briefs. Differences were found in both the ratings of proceeding to court and conviction, and the factors underpinning the ratings across the two professional groups. The implications of the findings for police organisations are discussed.

Resale price maintenance - in need of further reform

The Competition Policy Reform Act extended the resale price maintenance provisions of the Trade Practices Act 1974 to include services and provide for authorisation where the conduct can be shown to benefit the public such that it should be allowed. This article explores the scope of these changes and their shortcomings. It also seeks to provide some guidance as to their likely application and makes recommendations for further reform.

Structural change in Australian trade unionism, 1969-1996: a structural events approach

Traditional studies of long-term change in trade union structure have, in constructing explanations of change, predominantly focused on aggregate trends in union merger activity. This paper argues that our understanding of structural change in the Australian trade union movement would be better served by a structural events approach that examines the incidence of union formations, dissolutions and breakaways, in addition to that of union mergers. In doing so, it outlines how these structural events can be identified and measured, and presents the preliminary findings from the method's application.