The Australian Government last week introduced the long-anticipated Bill overhauling the Australian merger review regime to bring it into line with most international jurisdictions.
The proposed changes come into force on 1 January 2026.
As foreshadowed in our earlier article, the reforms create a new merger regime which is:
a. mandatory – merger parties must notify the ACCC before completing any acquisition that meets specific monetary thresholds; b. suspensory – implementation of notifiable mergers is prohibited until the ACCC grants approval; c. backward looking – requires parties to divulge (and the ACCC to take into account) all mergers in the three years prior to the reviewable deal; d. transformative for big companies doing small deals – the concept of substantial lessening of competition (SLC) will address entrenchment and consolidation of market power; and e. costly – i.e. notification fees are expected to be between $50,000 - $100,000 for most notified mergers, with an exemption for mergers notified by small businesses.
The Treasurer has stated that the mandatory merger notification thresholds will be triggered where:
The Treasurer has also stated that supermarkets (including liquor retailing in likely instances of crossover) will be the first industry where any deal must be notified to the ACCC for clearance before completion. This reflects the ACCC’s focus on addressing cost of living pressures and preventing consumer harms in essential goods markets.
While the Minister will have the power to adjust the above monetary thresholds in response to market changes and designate other industries similar to supermarkets, the above is likely to be confirmed in the coming month.
In addition, the Bill allows the Government to pass market concentration thresholds in the future if required.
Notification will be required for acquisitions that result in ‘control’ (i.e. the practical influence over the entity’s financial and operational decision making) – it will not be necessary where an acquirer already had control before the acquisition. However, the Minister can designate certain classes of acquisitions that must be notified, even if control isn’t involved.
Notification will also be required for acquisitions of shares that increase an acquirer’s voting power above 20 per cent in Australian-listed companies or managed investment schemes, and unlisted Australian companies with more than 50 members – even where the acquirer’s voting power was already above 20 per cent.
The Bill provides detail on the review process, which will unfold in two phases:
Once the ACCC has approved the deal, parties will have 12 months to complete – otherwise the determination becomes ‘stale’ (i.e. it expires).
The reforms introduce penalties for non-compliance with the regime (i.e. completing without approval if your deal meets the thresholds) and for providing false or misleading information.
Most importantly:
If parties seek review of the ACCC’s final decision, the Australian Competition Tribunal will conduct a limited merits review. This review is generally limited to the material that was originally provided to the ACCC but the Bill introduces scope for the parties to produce new material, as long as it is new information that was not in existence at the time the ACCC made its determination.
What does it all mean for your deal?
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