G+T’s Competition and Regulation team has successfully advised eBay on the acquisition by its subsidiary, Gumtree AU, of Cox Australia Media Solutions. Both parties supply online car classifieds and display advertising within Australia.
The ACCC has granted unconditional merger authorisation of Gumtree’s proposed acquisition of Cox Australia Media Solutions (Cox Media), on the basis that it would not result in a substantial lessening of competition in either market.
The matter is novel as it is only the second time the ACCC has used its merger authorisation powers (introduced in November 2018). Merger authorisation is a public process that involves a much higher degree of scrutiny that an informal merger review process but allows for the ACCC’s decision to be made on a fixed timetable and for consideration to be given to public benefits, rather than confined to an assessment of likely competitive effects, so allows for a more holistic consideration of the merits of the transaction.
The successful authorisation is strategically important as the parties are the second and third largest competitors in the market and the ACCC has previously opposed a merger within the market on competition grounds.
The parties consider that public significant benefits will result from the transaction, in terms of improved products for users of the platform and a stronger competitive alternative to the largest player in the market: Carsales, as well as providing consumers an alternative to the growing Facebook Marketplace.
Yesterday’s decision is a great result for the client as it has provided regulatory certainty to proceed with the merger, in a relatively short timeframe of less than four months from the date of filing to decision. Deal certainty within a short time frame is particularly important in context of current global economic conditions.
The G+T team has led the competition law strategy, prepared public submissions to the ACCC and detailed supporting evidence, including witness statements, and has instructed the preparation of expert economic and consultant reports by RBB Economics and Simon Kucher & Partners.
The G+T team was led by Competition, Consumer + Market Regulation partner Elizabeth Avery and special counsel Louise Klamka, with support from special counsel Geoff Petersen and lawyers Sophie Player, Rheya Shah, Johnathon Geagea, Isabel Owen, Jessie-Grace Stephenson. A large cross-practice group team also advised on aspects of Australian law and on the Due Diligence process, including IP, Corporate Advisory, Privacy and Employment teams.
Elizabeth Avery commented “eBay’s acquisition of Cox Media will enable Gumtree Motors to significantly grow its audience and inventory reach, making it more competitive against Carsales and Facebook Marketplace, and providing more choice for consumers. We are delighted to have successfully advised and supported eBay throughout the ACCC process and are pleased to receive unconditional authorisation.”
Gilbert + Tobin’s Competition and Regulation Group is the pre-eminent competition practice in Australia. They are known for achieving outstanding commercial results, through innovative solutions and perseverance even when previous applications for transaction clearance or dispute settlement have failed. The practice group consists of seven partners, five special counsel and over 35 lawyers. The team was named the leading firm in Asia-Pacific for Competition (Who’s Who Legal 2018), ranked Band 1 for Competition/Antitrust (Chambers Asia-Pacific 2019) and Tier 1 for Competition + Trade (Legal 500 2019).