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9 Corp. & Bus. L.J. 223 (1996)
Issues Raised by the Proposed Acquisition of Taubmans by Wattyl

handle is hein.journals/candbul9 and id is 227 raw text is: ISSUES RAISED BY THE PROPOSED
by Rhonda L Smith*
Wattyl approached the Australian Competition and Consumer Commission
('ACCC') late in July 1995, seeking informal approval to acquire the
architectural and decorative paints division of Taubmans, owned by
Courtaulds, a British company. By early August, the Commission had
advised Wattyl that such an acquisition was likely to substantially lessen
competition, thereby breaching s50 of the Trade Practices Act 1974 (Cth)
('TPA'). Discussions between the parties and the ACCC continued until the
proposed acquisition was made public on 23 October 1995. The ACCC
then commenced market inquiries in relation to the proposal which
reaffirmed its earlier position. In early December, following further
discussions, the Commission again advised the parties that the proposed
acquisition was likely to breach s50 of the TPA.
On 11 March 1996, the Commission instituted proceedings in the Federal
Court to restrain Wattyl and Taubmans from completing the deal, and this
injunction was granted on 14 March 1996. However, rather than
proceeding to a hearing of the matter in the Federal Court, the parties then
applied to the ACCC for authorisation of the merger on 3 April 1996. The
Commission issued its determination refusing authorisation on 17 May
1996 and, on 6 June 1996, Wattyl and Taubmans sought a review of the
Commission's decision by the Australian Competition Tribunal. However,
just prior to the commencement of that review, Courtaulds announced the
sale of Taubmans to Plascon, a South African paint producer.
Had the Tribunal review proceeded, a number of issues of importance for
competition policy would have been canvassed. The purpose of this article
is not to comment on the validity of the claims of Wattyl and Taubmans on
the one hand, or on the decision of the ACCC on the other. The latter is a
publicly available document.I Rather, the purpose is to outline and consider
the key issues raised by the takeover proposal which may be relevant to
future mergers.
*     Commissioner with the Australian Competition and Consumer Commission
('ACCC'). The views expressed are the author's own and are not necessarily
those of the Commission. The author is grateful to Dr Jill Walker, Professor
Allan Fels and Mr Hank Spier for comments on an earlier draft of this article.
1     Re Wattyl (Australia) Pty Ltd, Courtaulds (Australia) Pty Ltd & Ors (1996)
ATPR (Com) 150-232.

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