Significant recalibration to notification thresholds in Australia’s merger control reforms

Treasury responded to industry consultation that the original framework over-captured routine acquisitions such as those made "in the ordinary course of business", standard business leases, various financing transactions and insolvency-related sales. Most notably, the amendments exempt many standalone asset acquisitions and ordinary-course leases of business premises acquired from 1 January 2026 (provided the acquirer is not a supermarket).

Following a targeted consultation in November, Treasury has also announced that new tiered asset tests will apply to certain standalone asset deals put into effect from 1 April 2026.

Businesses now face a rapidly shifting regulatory landscape, as the new merger laws are being adjusted on the run.

Ordinary course land deals now largely exempt – including routine leases

One of the strongest concerns raised by property, retail and financial sector participants was that the regime would capture ordinary leases and routine land dealings. Treasury has now revised its approach:

• Land acquired in the ordinary course of business is exempt under the amendment, unless the acquirer is subject to a “targeted notification” category. Examples of ordinary course acquisitions include retailers leasing or purchasing land for a warehouse to store their inventory, manufacturers leasing or purchasing land for a new manufacturing facility, energy generators purchasing land for a solar farm, or energy distributors purchasing land to build pylons on. The targeted notification rules currently apply to supermarkets, but there are potential future designations for fuel, liquor and oncology-radiology sectors.

• There is also now a transitional carve-out for multistage land dealings that started before 1 January 2026 but complete after that date. Broadly, where a business acquired an equitable interest, for example by entering into an Agreement for Lease, a subsequent equitable or legal interest will not be notifiable.

This is a significant change from the original design and means many standard business leases, extensions and property transactions, previously at risk of notification, will not trigger filings for most businesses. While this late rescue is welcome, its timing inevitably leaves businesses scrambling to re-check transactions already in train.

Notification thresholds for transactions being put into effect in Q1 2026

The approach to asset purchases has also shifted, as the “20% of market value” test will no longer apply for any asset acquisitions put into effect from 1 January 2026.

For the first quarter of 2026, the test for a standalone asset deal is straightforward: if, in substance, the assets comprise the whole or substantially the whole of a business, the original notification thresholds will apply. In short, these are:

1. Where the combined revenue of the merger parties (and their connected entities) is ≥ A$200 million:

   1. the target group’s Australian revenue is ≥ A$50 million; or

   2. the transaction value is ≥ A$250 million.

2. Where the acquirer group’s Australian revenue is ≥ A$500 million:

   1. the target group’s Australian revenue is ≥ A$10 million.

If not, an interim arrangement will apply until April 2026: notification is only required if both the buyer group’s Australian revenue is at least A$200 million and the transaction or market value of the deal is at least A$250 million.

Notification thresholds for transactions being put into effect from Q2 2026

From 1 April 2026, a tiered asset test will replace that interim arrangement. Acquisitions of assets that don’t comprise all or substantially all the assets of a business will be notifiable only:

• if the Australian revenue of the acquirer group is ≥ A$200m and the transaction or market value of the deal is ≥ A$200m; or

• where the purchaser is part of a very large corporate group (Australian revenue ≥ A$500m), if the transaction or market value of the deal is ≥ A$50 million.

The changes offer some welcome clarity. The amendments mean that many routine asset acquisitions are no longer swept into the regime.

However, acquirers will need to carefully review the distinction between standalone assets and “all or substantially all” of a business. For example, if the acquired assets allow the acquirer to keep running a business much like the one previously operated, this would likely mean the acquisition involves “substantially all” of the assets, and the original revenue thresholds will apply.

Broader exemption for external administrators from 1 January 2026

Previously, the exemption for acquisitions relating to insolvent entities was limited only to acquisitions by administrators, receivers, receiver-managers and liquidators. Stakeholders raised concerns that this was too narrow and would require filings for other insolvency-related appointments, causing delay for creditors and additional costs for entities already facing financial distress. The narrow scope also had the potential to delay crisis-management or resolution processes administered by regulators.

In response, Treasury has widened the exemption. It now covers acquisitions by a person:

• in the course of managing an entity's affairs during insolvency or financial distress;

• who takes control or management of a business or assets under specific financial laws or similar situations (covering other insolvency-related roles); and

appointed by court or under legislation to act in a similar role.