2 Nov 2009

Firms given takeover clearance guidelines

7:34 am on 2 November 2009

The Commerce Commission has released guidelines on how firms can apply to takeover failing firms.

When seeking takeover clearance, companies can claim an anti-competitive merger should be approved because the failing company or division is about to go out of existence.

The commission says firms applying for such clearance need to provide hard evidence of lagging long-term profit, and that they have tried to find a third-party buyer.

A competition law expert at Minter Ellison Rudd Watts, Andy Matthews, says some takeovers have been rejected because the applicants did not understand what evidence is required.

Mr Matthews says introducing the guidelines should allow the commission to fast-track its procedure.