Deal makers involved in transactions that meet the thresholds and may not complete by year end should consider engaging with the Australian Competition and Consumer Commission (ACCC) now to manage risk and ensure timely completion.
Key observations
- The ACCC will review a lot more deals: The notification thresholds are low. The new regime will result in many more transactions being notified, particularly for parties with a material presence in Australia.
- Deal makers must watch the transition: Transactions that will complete this year and beyond need to include appropriate conditions precedent and sunset provisions in documentation to accommodate the transition period, and timing will have to be managed carefully for deals with extended timelines. Although the informal clearance regime runs until December 31, 2025, parties are encouraged to apply by October 1, 2025 and should carefully consider their ACCC clearance options during the transition.
- Serial acquisitions and complex deals will face closer scrutiny (and more risk): The ACCC will consider all acquisitions in the same market(s) over a three-year period in aggregate to determine if notification is required, as well as the competitive effects. This will affect regular deal-doers including private capital businesses.
- Substantial new filing fees apply under the new regime: Charges span from AUD8,300 for a notification waiver to up to AUD1,595,000 for complex Phase 2 reviews, depending on transaction size and value.
- Risk allocation will attract more attention: When a review is expected to be difficult, risk allocation mechanisms in deal documentation will logically attract more attention. This is a common theme globally.
What transactions need ACCC clearance under the new regime?
With limited exceptions, acquisitions of shares or assets (referred to as the target) must be notified before they are put into effect if:
- for an acquisition of shares, there is a change of control of the target;
- the target is "connected with Australia"; and
- certain financial thresholds are met.
Connection to Australia
A target is connected to Australia if it either:
- shares in a body corporate that carries on a business in Australia (or intends to carry on a business in Australia)
- is an asset that is used in, or forms part of, a business carried on in Australia.
What are the notification thresholds?
Where a transaction meets one of the following financial thresholds, it must be notified for approval by the ACCC before it can be put into effect:
Acquisitions resulting in large or larger corporate groups
Merger parties’ combined Australian turnover is AUD200m or more and either:
i) The target’s Australian turnover is at least AUD50m.
ii) The transaction value is at least AUD250m.
iii) Cumulative Australian turnover from the target and any similar acquisitions in the last three years is at least AUD50m, and the target’s Australian turnover is at least AUD2m.
How are the thresholds calculated?
- Australian turnover comprises gross revenue, determined in accordance with accounting standards, attributable to transactions or assets within Australia or transactions into Australia, for the most recent 12 month reporting period.
- The Acquirer’s revenue includes revenue of the acquiring entity and its "connected entities". Similarly, if the target is a body corporate, the target’s turnover includes the target and its "connected entities". A "connected entity" is either:
- An entity that is a subsidiary, holding company or related body corporate of the acquiring entity or the target.
- An entity that either controls, is controlled by, or is under common control with the acquiring entity or the target.
- For the threshold relating to the cumulative Australian turnover of the target and similar acquisitions over the past three years:
- A similar acquisition is one that relates to the same or substitutable goods or services;
- The turnover attributable to previous acquisitions is the Australian turnover of those shares/assets as at the contract date of the previous acquisition.
- Certain acquisitions are excluded from this calculation, namely those—(i) where the Australian turnover of the target (including each connected entity) was less than AUD2m; (ii) that were previously notified under the new regime; or (iii) that were not connected to Australia.
- For assets, to the extent that it’s not reasonably practicable to attribute Australian turnover to an asset, the figure that equals 20% of the market value of the asset will apply.
- Transaction value is the greater of: (i) the market value of all share/assets acquired; or (ii) the consideration paid/receivable under the contract. While this is a global number, only transactions with an Australian nexus meet the thresholds, filtering out purely offshore deals.
Designated transactions
The government can designate certain types of transactions as requiring notification. Australia’s major supermarket chains, Coles and Woolworths, have been specifically "designated", meaning mandatory notification will be required for acquisitions by major supermarkets and their ‘connected entities’, regardless of whether the monetary thresholds are met.
Further designations are expected over time—ACCC chair Gina Cass-Gottlieb has indicated that the ACCC’s intention is to request designations for key players in the liquor, pathology, and oncology-radiology sectors once the regime is operational, citing trends towards consolidation in these industries and their critical public interest roles. Other industries like digital platforms, fuel, childcare, aged care and medical GPs could also be candidates for designation.
Exemptions
The following transactions do not fall within the scope of the new regime:
- Acquisitions that do not result in the acquirer obtaining control of the target, including, acquisitions of 20% or less voting power in an Australian listed company, listed scheme or a large unlisted company
- Internal restructures and re-organisations
- Acquisitions of assets in the ordinary course of business
- Certain land acquisitions
- Acquisitions by an administrator, receiver, receiver and manager or liquidator
- Certain acquisitions of debt instruments, financial securities (e.g. dividend reinvestments, derivatives, buy-backs, custodial holdings), security interests, or through financial market infrastructure (e.g. clearing and settlement facilities)
What are the review timeframes?
The timelines for review are:
- Waiver (up to 20 business days after the effective notification date): The waiver process will only be available from January 1, 2026, and details are yet to be published.
- Phase 1 determination (up to 30 business days, subject to extensions): The earliest time the ACCC can make a decision is 15 business days after notification. Parties have until 20 business days after notification to offer a remedy, which may extend Phase 1 review for up to 15 business days.
- Phase 2 determination (up to 90 business days, subject to extensions): If the ACCC considers the acquisition could have the effect or likely effect of substantially lessening competition, it will commence a Phase 2 review at the end of Phase 1. The ACCC must issue a Notice of Competition Concerns before the end of 25 business days after Phase 2 commences and parties then have 25 business days to respond. Parties may also offer a remedy by day 60 which may extend Phase 2 review for up to 15 business days.
- Public benefit process (a further 50 business days): A public benefit process (essentially a Phase 3 review), will allow parties to make a subsequent application (post a negative Phase 2 review) to the ACCC to assess net public benefits.
Fees
Given that the current informal regime imposes no fees on applications, the new regime has significant filing fees. Fees start at AUD8,300 for a notification waiver and increase to AUD56,800 for a standard filing. For a complex Phase 2 review, additional cumulative fees apply, ranging from AUD475,000 to AUD1,595,000 depending on the size of the acquisition—for example, AUD475,000 if the transaction value is less than AUD50m, AUD855,000 for transactions valued between AUD50m and AUD1bn, and AUD1,595,000 for transactions valued at over AUD1bn.
The fee for a public benefit assessment application is an additional AUD401,000.
Transitional arrangements
We are now in the transition period, which will continue until January 1, 2026. During the transition period, the following options for merger clearance are available:
- The transaction may be reviewed under the new regime voluntarily (to avoid the need for re-filing on January 1, 2026).
- Informal clearance (under the current informal regime) may be obtained by December 31, 2025. The ACCC has indicated that such applications should be submitted as early as possible, and before October 1, to ensure it can be reviewed in time. If informal clearance is granted, the parties can complete within 12 months of receipt of that approval without having to reapply under the new regime. However, if merger clearance is not received before January 1, 2026, then notification under the new regime will be required.
If informal clearance was obtained before July 1, 2025, but the transaction will complete after December 31, 2025, the parties need to obtain an updated informal clearance before December 31, 2025. The second dot point above would then apply to the refreshed informal clearance.
