Changes risk stalling M&A market
The Australian mergers and acquisitions industry could be brought to a standstill by proposed changes to the consolidation regime, according to Deloitte.
Deloitte tax partner Anthony Cipriano said the consolidation changes impacted how assets in mergers and acquisitions scrip transactions were valued for tax and had created confusion in the market.
“With this uncertainty, the industry does not know how to value the assets of a company and consequently how to model mergers and acquisitions transactions,” he said.
Cipriano said that while the Government had provided some clarification with respect to transactions announced prior to October 13 this year, uncertainty remained with respect to subsequent transactions.
“Going forward, without knowing how the tax consolidation rules work where scrip consideration is provided by the acquiring company, groups are in limbo and unable to structure deals with any certainty as to the tax outcomes,” he said.
Cipriano said that until the market received certainty on what laws would apply going forward, he expected many transactions to be in a holding pattern.
“This potentially affects all ASX-listed companies, not just the top end of town,” he said.
AUTHOR
Mike Taylor
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