Hamilton Locke Recognised in Doyle’s 2022 WA Guide
Hamilton Locke’s Corporate team has been recognised in the Doyle's 2022 Western Australia Guide, a…
This article is part of our Disputes in M&A: 5 key trends for 2022 and beyond series: a collaboration between our market leading Corporate and Dispute Resolution teams.
The Australian mergers and acquisition (M&A) market continues to thrive. Sentiment in the technology, media and telecommunications, as well as pharmaceutical, medical, biotech and financial service sectors remains at an all-time high for 2022.1 This sentiment was driven by a strong year for Australian mid-market M&A in 2021, with total deal value increasing by 39%.2
There is immense pressure on the market to maintain momentum. This pressure is perhaps greater given lingering economic uncertainty as Australia recovers from COVID-19 and feels the effects of global geopolitical tensions. However, unprecedented growth nearly always leads to increased corporate risk taking which necessarily attracts the attention of regulators.
In an address to the Australian Institution of Company Directors (AICD) corporate governance summit, Australian Securities and Investments Commission (ASIC) Chair Joe Longo highlighted ASIC’s corporate governance priorities for 2022.
Emphasising ASIC’s approach to corporate governance, Mr Longo stated:
‘A critical aspect of what directors do is manage risk’
‘ASIC is not here to discourage risk-taking and innovation’
‘ASIC recognises that running a company is about managing risks, and involves decision makers allocating resources and making decisions very often in conditions of uncertainty’
It is clear ASIC’s stance remains aligned with judicial authority which provides that the very nature of commercial activity necessarily involves uncertainty and risk taking.3 However, ASIC’s measured view on corporate risk-taking should not be taken as an assurance that company directors should sleep easily at night.
As reflected by outgoing Australian Competition and Consumer Commission (ACCC) Chair Rod Sims in his 2022 – 2023 policy address to the Committee for Economic Development of Australia (CEDA), with Australia’s surge in M&A activity comes an increase in ACCC engagement. In fact, 2021 saw a 41% increase in mergers notified to the ACCC, 61% higher than the average over the last five years. Naturally, with the M&A boom continuing (albeit at a reduced level) in 2022, ACCC oversight (and inevitable scrutiny) can only be expected to increase.
Hamilton Locke’s market leading corporate and dispute resolution teams have identified specific areas of heightened risk in M&A activity that have, and are expected to continue, to give rise to disputes. In the coming months, Hamilton Locke will publish a 5-part series on Disputes in M&A: 5 key trends for 2022 and beyond. The series will discuss issues in M&A that lead to disputes as they arise across pre-transaction, pre-closing and post-closing stages of M&A transactions:
*Hamilton Locke is consistently recognised by clients and leading legal research publications for our legal expertise and service. We have been recognised as one of Australia’s top 40 law firms by the Australian Financial Review. We have also received over 80 awards and recognitions, including MergerMarket, Doyle’s, Australasian Lawyer, Best Lawyers, Chambers and Partners, and Legal 500.
1 Pitcher Partners, Megermarket, Dealakers: Mid-market M&A in Australia 2022 Outlook. 2022 https://www.pitcher.com.au/wp-content/uploads/2022/02/Pitcher_Partners_DealMakers2022_FINAL2_15FEB.pdf.
2 Pitcher Partners, Megermarket, Dealakers: Mid-market M&A in Australia 2022 Outlook. 2022 https://www.pitcher.com.au/wp-content/uploads/2022/02/Pitcher_Partners_DealMakers2022_FINAL2_15FEB.pdf.
3 ASIC v Mariner (2015) 241 FCR 502, per Beach J.