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In this edition, we cover the draft merger assessment guidelines released by the Australian Competition and Consumer Commission (ACCC), the $10.5 million penalty imposed on Active Super for greenwashing and the Takeovers Panel’s reasons for decisions in relation to the affairs of Invest Blue Pty Ltd (Invest Blue).
In Over the Horizon, we discuss comments from US Federal Reserve Chair, Mr Jerome Powell, downplaying tariff-related inflation risks amid global market tensions.
Regulatory
ACCC releases draft merger assessment guidelines
On 20 March 2025, the Australian Competition and Consumer Commission (ACCC) released draft merger assessment guidelines for the new mandatory merger control regime which will come into effect on 1 January 2026. The guidelines outline the analytical framework the ACCC will apply when assessing notified acquisitions and are aimed at providing predictability as to how the “substantial lessening of competition” and “net public benefit” tests will be applied in different situations. Submissions are open until 17 April 2025. The ACCC will update the guidelines before the voluntary notification regime commences on 1 July 2025 and will separately release merger guidelines outlining the processes it will follow when it receives notification of an acquisition, and how interested parties can engage in these processes.
Legal
Active Super Penalised for Greenwashing Misconduct
On 18 March 2025, the Federal Court imposed a $10.5 million penalty on LGSS Pty Ltd ATF Local Government Super (Active Super) for greenwashing. The court found Active Super had misrepresented its ‘green’ or ‘ESG’ credentials in various publications which falsely claimed it had eliminated investments in gambling, coal mining, oil tar sands and, following the invasion of Ukraine, Russia. This is the third greenwashing court outcome obtained by ASIC, following successful proceedings against Mercer Superannuation (Australia) Limited and Vanguard Investments Australia. This decision highlights the importance of accurate ESG disclosure for financial services companies and the potential reputational and financial risks of engaging in greenwashing. ASIC Information Sheet 271, How to avoid greenwashing when offering or promoting sustainability-related products, poses several questions that are useful to consider when preparing communications and disclosures about sustainability-related products.
Takeovers Panel publishes reasons for decisions in relation to the affairs of Invest Blue
On 20 March 2025 and 18 March 2025 respectively, the Takeovers Panel published the reasons for the Panel’s decision to decline to conduct proceedings on an application from Kanenaro Pty Ltd ATF Denaro Family Superannuation Fund (Kanenaro) in relation to the affairs of Invest Blue and the President of the Panel’s reasons for declining to grant consent to an application for a review of the sitting Panel’s original decision.
As discussed in a previous edition of Boardroom Brief, Kanenaro sought orders to unwind a share purchase agreement between Invest Blue and Ironbark Investment Partners Pty Ltd (Ironbark). The Panel determined that Invest Blue had fewer than 50 members at the time of the acquisition and noted that, while this did not remove the Panel’s jurisdiction, there was no deliberate strategy to take Invest Blue outside the ambit of Chapter 6 of the Corporations Act 2001 (Cth) and deprive shareholders of the benefits and protections afforded under that Chapter.
In response to the issues raised in Kanenaro’s review application, the President considered that:
ASIC’s records are not a definitive source for determining when an acquisition completed, and a failure to report matters to ASIC is not a matter for the Panel.
While Kanenaro did not have an opportunity to make submissions on two documents annexed to the preliminary submissions of Invest Blue and Ironbark, any new evidence raised was not of sufficient weight to lead a review Panel to reach a different conclusion.
While the Panel can tailor its orders to mitigate prejudice, the Panel is entitled to consider the remedies available and had concerns with the orders requested by Kanenaro.
The argument that the terms of Invest Blue’s shareholders agreement treats employee shareholders (who had entered into a bare trust arrangement) the same as other shareholders was not relevant to whether Invest Blue was a Chapter 6 company.
The possible effect on employee shareholders was not relevant in determining whether Invest Blue was a Chapter 6 company.
The President ultimately considered that the merits of the sitting Panel’s decision weighed against granting consent and a review Panel would be unlikely to conduct proceedings, and he declined to grant consent to the review.
Over the Horizon
Federal Reserve downplays tariff-related inflation risk as tariff tensions continue to escalate
Recently, global markets have been significantly disrupted by escalating tariff measures imposed by the Trump administration and those imposed by other nations in return. At a press conference on 19 March 2025, following the US Federal Reserve’s decision to leave its policy interest rate unchanged, Chair Jerome Powell stated that “a good part of [inflation] is coming from tariffs... it can be the case that it's appropriate sometimes to look through inflation if it's going to go away quickly without action by us, if it's transitory” and that inflation being transitionary was “the base case”. The comments generated significant media attention given the widespread concerns over the inflationary impact of tariff measures and calmed financial markets to some extent. Notably, the same word – “transitory” – was used by the US Federal Reserve when with describing the likely effect of COVID-19 on inflation in the US. While the market reaction may indicate that investors believe tariffs and other policies won’t have a lasting effect on inflation and economic growth, only time will tell their full effect.