Mandatory merger control has arrived

After a frantic evening in the Senate last night, the Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill 2024 was passed with no amendments.

From 1 January 2026, merger parties that trigger defined thresholds must notify the ACCC and obtain clearance prior to completion, or substantial penalties will apply. The regime will apply to relevant acquisitions that are put into effect on or after that date, excluding deals that receive clearance under the existing regime by 31 December 2025 (provided those deals complete within 12 months of clearance). Parties can voluntarily notify under the new regime from 1 July 2025.

The legislation sets out the core framework for the regime. Thresholds will be set out regulations, but the government has announced that it intends to have 3 core monetary thresholds with special rules for selected sectors (see further below).

While the statutory time periods have now been set, how long the end-to-end process takes in practice will be influenced by how extensive the upfront information requirements are – and that’s a matter still to be consulted on. The ACCC will also be publishing guidelines on process and substance that will be crucial to understanding how the regime will work in practice.

The ACCC recently released a Statement of Goals outlining its objectives for the implementation of the regime, including ensuring faster timeframes, transparency and a streamlined process.

Stay tuned for more updates as further details emerge, and practical insights on what to expect in practice and how to prepare.

The key details: what you need to know

As detailed in our October alert, the key features of the mergers legislation (which remain unchanged) are:

1. Mandatory and suspensory regime: The amendments replace the existing voluntary notification regime with a mandatory and suspensory administrative system. Businesses will now be legally required to notify the ACCC and receive clearance before completing a transaction that triggers specified thresholds. Acquisitions that are illegally put into effect will be rendered void and substantial penalties may be ordered by the Federal Court for failure to notify and/or early completion.

2. Types of transactions caught: The regime applies to acquisitions of shares or assets. There is an exemption where the acquisition of shares in the capital of a body corporate does not result in the acquisition of control that is largely aligned with the concept of control in section 50AA of the Corporations Act. Under section 50AA, "control" refers to the capacity of one entity to determine the outcome of decisions about another entity’s financial and operating policies, which requires a consideration of the practical influence that can be exerted, and is not strictly limited to formal rights. There are also some additional exemptions including in relation to land, internal restructures and acquisitions by Government authorities.

3. Thresholds for notification: Will be set out in regulations but the Government has announced its intention to set three notification thresholds (the effectiveness of which will be reviewed 12 months after the regime commences):

• any merger if the Australian turnover of the combined businesses is above $200 million, and either the business or assets being acquired has Australian turnover above $50 million or global transaction value above $250 million.
• any merger involving a very large business with Australian turnover more than $500 million buying a smaller business or assets with Australian turnover above $10 million.
• to target serial acquisitions, all mergers by businesses with combined Australian turnover of more than $200 million where the cumulative Australian turnover from acquisitions in the same or similar goods or services over a three-year period is at least $50 million will be captured, or $10 million if a very large business is involved.

Parties can seek a notification waiver from the ACCC to confirm that an acquisition doesn't need to be notified.

4. Special sectors: The Minister can determine specific classes of acquisitions that must be notified, even if the notification thresholds are not satisfied.

The Government has announced the intention to initially use this power to require notification of:

• every supermarket merger; and
• acquisitions of an interest above 20% in an unlisted or private company, if one of the companies involved in the deal has turnover more than $200 million.

Sectors that might be designated include fuel, liquor and oncology‑radiology.

5. Who is responsible for notifying: The "principal party to an acquisition" (typically the acquirer) is legally responsible for a breach, but notification by any one of the parties will be sufficient to satisfy the notification obligation.

6. Notification form and content: There will be a notification form and upfront information requirements. Government has indicated that there will be a simplified form for mergers that are unlikely to raise competition concerns.

7. Substantive test for clearance: The ACCC must grant clearance unless it is satisfied that the acquisition would have the effect, or be likely to have the effect, of substantially lessening competition. The legislation also makes it clear that a substantial lessening of competition can be constituted by the creation, strengthening or entrenching of substantial market power. The ACCC may treat the effect of the acquisition as being the combined effect of the acquisition as well as acquisitions by at least one of the parties that involve competing goods or services in the three years prior to the notification date.

If unconditional clearance isn't granted, there is an option for parties to make an application for clearance on the basis that public benefits of the transaction outweigh the harms.

8. Review timeline: The review timeline will start on the effective notification date, which will be confirmed by the ACCC once it has received complete information. While we know there will be pre-lodgement discussions, and this stage it is unclear how extensive these will be and how much time this will add to the statutory review periods.

There is a 30-business day review period for Phase I (with a fast track 15 business day option if no concerns are raised). There will be a further 90 business day review period for transactions requiring a more in-depth Phase II review. If a decision isn't made within the review period, clearance is deemed. Businesses should also be aware that they will have a 12-month period to complete an acquisition after receipt of clearance.

9. Interaction with FDI/ national security reviews: There is no change to FIRB’s regime, and the ACCC will continue to be a consult partner for transactions that are notified to FIRB. We expect that FIRB will continue its practice of waiting for ACCC confirmation that there are no competition concerns before it issues its own approval, even for transactions that fall below the ACCC notification thresholds.

10. Review of clearance decisions: Limited merits review by the Competition Tribunal is available, based on the information that was available to the ACCC at the time of making its determination (with some exceptions – eg. for new information that was not in existence).