Australia's mandatory merger control regime has been in force for less than ten months, but yesterday the Government filed down some of its sharpest edges. Each amendment seeks to address some of the practical difficulties that merger parties have faced under the new regime: the automatic voiding of non-notified acquisitions; the broad definition of control and associates; and the short window in which parties must complete following clearance.
1. Non-notified acquisitions: from automatically void to voidable
What changed
Under the prior regime, an acquisition that met the notification thresholds but was not notified to the ACCC was automatically void. This automatic voiding occurred regardless of whether the failure to notify was deliberate, whether the deal raised any competition concerns, and irrespective of any consequences for innocent third parties such as lenders, customers and employees.
From 16 September 2026, a non-notified acquisition is no longer automatically void. Instead, the ACCC may apply to the Federal Court for a declaration that the acquisition is void. The Court must make the declaration unless it considers it would be undesirable to do so for example, where voiding would cause significant harm to innocent third parties, or where the vendor company has been wound up. The ACCC has a six-year limitation period to apply to the Court for a voiding declaration for non-notified acquisitions.
Critically, the Court cannot consider whether the non-notified acquisition would substantially lessen competition. The Government has designed this deliberately to preserve the ACCC's role as the first instance decision maker on competition merits and to ensure merger parties cannot bypass the notification system by effectively inviting the Federal Court to conduct the competition assessment instead.
What has not changed
Automatic voiding is retained for circumstances where a deal has been notified to the ACCC but is completed before the deal is finally considered (being after the expiry of a 14 day appeal window following an ACCC decision) or after the ACCC has blocked the acquisition.
The penalties remain the same for failing to notify - the greater of $100 million, 30% of Australian turnover, or three times the benefit obtained for each contravention. The ACCC also has a new power to seek injunctions from the Federal Court to freeze integration activity while it investigates or pursues a voiding application.
What this means for your deal
The shift from void to voidable is significant, prior to the amendments, the serious consequences of a wrong call have arguably resulted in merger parties taking a conservative approach to whether their deals are caught. There are three key practical implications:
1. Lenders and counterparties can breathe easier. The previous automatic voiding regime created real uncertainty for third parties who dealt with the transacting parties in good faith. Financing, supply and customer agreements all sat on potentially unstable foundations. A court supervised process that weighs the impact on innocent parties before declaring a transaction void is a meaningful improvement for deal certainty.
2. "Strategic non-notification" is still a losing strategy. The ACCC retains substantial enforcement tools and has signalled that it will not hesitate to seek voiding orders and penalties against parties that should have notified. International experience shows that regulators look especially unfavourably on deliberate noncompliance by sophisticated, well resourced parties. The reputational and financial cost of a voiding application far exceeds the cost of notification.
3. Review your risk allocation provisions now. Merger agreements entered before today may contain representations, warranties and indemnities calibrated to the automatic voiding regime. For any deal where completion has not yet occurred, consider whether your risk allocation provisions need to be updated to reflect the new voidable framework. In particular, the ACCC's six-year window to seek a voiding order and the Court's broad power to make consequential orders including divestiture.
2. Control exemption and associates: narrowing the net around minority investments
What changed
The mandatory regime requires notification for share acquisitions that confer control of a target (subject to monetary thresholds). Previously, control was defined by reference to section 50AA of the Corporations Act 2001 (Cth), modified so that a person could be treated as having joint control if they and one or more associates (as broadly defined in Chapter 6 of the Corporations Act) jointly had the capacity to determine the target's financial and operating policies.
That broad definition of associates meant that parties could be treated as having joint control simply because they were party to the same shareholders' agreement, even where neither had any practical ability to influence the target's competitive conduct.
Control is now assessed by reference to whether the acquirer (alone or with associates) has the capacity, in a real and practical sense, to determine the outcome of decisions about the target's financial and operating policies. The emphasis is on practical influence, not theoretical capacity derived from formal legal relationships. Furthermore, associate has been narrowed to only include circumstances where a person is the same corporate group, has entered (or propose to enter) an agreement for the purpose of controlling or influencing the target's financial and operating policies, or are acting (or proposing to act) in concert for that purpose.
There are now also express carve outs so that a person is not an associate merely because of:
- minority shareholder protection rights;
- dividend policy agreements;
- arm's length financing arrangements;
- arm's length standard shareholder or member agreements about governance processes;
- rights to dispose of securities; or
- professional advisory relationships, financial product dealings, takeover bid offers, or proxy appointments.
What has not changed
The bright line voting power thresholds remain unchanged. Even if the revised control exemption means a transaction does not confer joint control, notification may still be required where the acquisition results in the acquirer's voting power crossing certain thresholds, and the monetary thresholds are also met. These thresholds operate independently of the control analysis.
What this means for your deal
This is the amendment with the greatest practical impact for the largest number of transactions. Three categories of deals stand to benefit:
1. Venture capital and private equity co-investments. Co-investors who hold standard institutional or minority shareholder protection rights will no longer automatically be treated as associates for the purpose of joint control. This removes a significant source of uncertainty for VC and PE sponsors structuring consortium investments, follow on rounds and syndicated positions.
2. Shareholders' agreements and governance arrangements. Being party to a shareholders' agreement will no longer, of itself, make you an associate of other shareholders. The new test requires a more specific connection such as an agreement or concerted action aimed at influencing the target's financial and operating policies. Standard governance provisions, accession deeds and minority protections fall on the safe side of the line.
3. Financing and subscription arrangements. Arm's length financing agreements and standard subscription arrangements are expressly excluded from the associate definition. Lenders and subscribers can participate in transactions with greater confidence that their involvement will not inadvertently trigger a joint control analysis.
3. Stale clearances: a new extension mechanism to avoid re-notification
What changed
Prior to yesterday’s changes, if an approved transaction was not completed within 12 months of the ACCC's determination, the notification became "stale" and the parties were required to re-notify the transaction and obtain fresh clearance from scratch. This was a blunt instrument that took no account of the reasons for the delay or whether market conditions had materially changed. Several transactions have already been notified twice (the first notification being an exemption under section 189 of the CCA just prior to the commencement of the new regime, and again under the mandatory regime).
From 16 September 2026, parties can apply to the ACCC for an extension of their clearance decision for up to six months. There is no limit on the number of extensions that may be granted. In deciding whether to grant an extension, the ACCC must consider:
- whether there are reasonable grounds why the acquisition has not been put into effect;
- whether there have been material changes to the market since the initial determination; and
- whether it would be more appropriate for the acquisition to be re-notified.
Extension decisions are not subject to merits review but remain amenable to judicial review. If an extension is granted, any conditions attached to the original clearance continue to apply.
What this means for your deal
1. Large global deals. Large global transactions requiring approvals from multiple regulators, are the primary beneficiaries. Rather than facing renotification in Australia while still awaiting approval elsewhere, parties can seek rolling six month extensions while the deal progresses through other jurisdictions.
2. Conditionality and long stop dates. Deal teams structuring conditions precedent and long-stop dates should factor in the extension mechanism as a planning tool. Where the risk of a 12 month completion deadline is a live commercial concern, the availability of extensions may affect your approach to long stop dates, sunset provisions and break fees.
3. ACCC engagement. While the extension is a welcomed amendment, the extension is not automatic. Parties must provide the ACCC with an application seeking an extension and the ACCC must be satisfied that the reasons for delay are reasonable and that renotification is not the more appropriate action. Parties should inform the ACCC early when they believe they will not complete within the initial 12 month timeframe and be prepared to explain the commercial reasons for any delay and demonstrate that competitive conditions have not materially shifted.