Australia’s new merger control regime is now in force (with some last-minute changes)

In this update, we outline the key aspects of the regime that deal makers need to know as they navigate these new rules in Australia.

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. However, it appears the ACCC will use the notification waiver process to quickly wave through clearly non-problematic deals.
• The application of the thresholds, including prescribed exceptions, can be technical and complex. Careful analysis is required in some circumstances before deciding not to notify. Deals that are required to be notified under the regime, but are not, are deemed legally void.
• 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; AUD56,800 for a standard Phase 1 review; and 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, or certain voting power thresholds are met
• the target is “connected with Australia”
• certain financial thresholds are met.

Change of control

Generally, an acquisition of shares does not have to be notified if it does not confer “control” (within the meaning of section 50AA of the Corporations Act) to the acquirer, or if the person already “controlled” the entity immediately before the transaction was put into effect.

A person “controls” an entity if they have the capacity to determine the outcome of decisions about its financial and operating policies, either alone or together with one or more “associates” within the meaning of Chapter 6 of the Corporations Act.

However, there are exceptions to this rule. The following classes of share acquisitions must be notified to the ACCC, even if they do not confer “control” to the acquirer:

• Where the target is an unlisted company, acquisitions where the acquirer’s voting power increases from ≤20% to >20%
• Where the target is any type of company, acquisitions where the acquirer’s voting power increases from between 20% and 50% to >50%
• Where the target is a listed company and the acquirer already controls the target, acquisitions where the acquirer’s voting power increases from ≤20% to >20%
• Where the target is a listed company and the acquirer does not control the target, acquisitions where the acquirer’s voting power increases from ≤20% to >50%

These provisions will apply from April 1, 2026.

Connection to Australia

A target is connected to Australia if it is either:

• shares in a body corporate that carries on a business in Australia (or intends to)
• an asset that is used in, or forms part of, a business carried on in Australia.

What are the notification thresholds?

Generally, 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:

A) Acquisitions resulting in large or larger corporate groups

Merger parties’ combined Australian turnover is AUD200 million or more, and either:

1. The target’s Australian turnover is at least AUD50m.
2. The transaction value is at least AUD250m.
3. 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.

B) Acquisitions by very large corporate groups

Acquirer group’s Australian turnover is AUD500m or more, and either:

1. The target’s Australian turnover is at least AUD10m.
2. Cumulative Australian turnover from the target and any similar acquisitions in the last three years is at least AUD10m, and the target’s Australian turnover is at least AUD2m.

How are the thresholds calculated?

General

• 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.” If the target is a body corporate, the target’s turnover includes the target and other ‘connected entities’ within the transaction perimeter. A “connected entity” is either:

1. an entity that is a subsidiary, holding company or related body corporate of the acquiring entity or the target
2. an entity that either controls, is controlled by, or is under common control with the acquiring entity or the target. In this context, “control” has the meaning in section 50AA of the Corporations Act, and that control can either be alone or together with one or more “associates” (within the meaning of Chapter 6 of the Corporations Act). However, from April 1, 2026, a company will not be considered an “associate” of the acquiring entity simply because they are party to an agreement (e.g. a shareholders’ agreement) that provides the company with minority shareholder protection rights. These are rights to protect their minority interests as an investor and do not have the capacity to practically influence the composition of a company’s board, appointment of senior managers, or decisions about a company’s financial and operating policies.

• Transaction value is the greater of:

1. the market value of all shares/assets acquired
2. the consideration paid/receivable under the contract.

While this is a global number, only transactions with an Australian nexus are notifiable, filtering out purely offshore deals.

Asset acquisitions

For the purpose of determining whether the financial thresholds are met in relation to asset acquisitions, a distinction is drawn between: (a) an acquisition of all, or substantially all, of the assets of a business; and (b) acquisitions of discrete assets.

a) Acquisitions of assets forming all, or substantially all, of the assets of a business

The amount to be calculated for the purposes of determining whether the financial thresholds are met is the Australian turnover of the target, to the extent that revenue is attributable to the business.

b) Acquisitions of discrete assets

For an acquisition of discrete assets which do not form all, or substantially all, of the assets of a business, the thresholds relating to the target’s Australian turnover is no longer relevant. Instead, notification will be required (where the other relevant thresholds are met), and:

• Until March 31, 2026—the transaction value is at least AUD250m.
• From April 1, 2026—the transaction value is either:
  • at least AUD200m (under the “Acquisitions resulting in large or larger corporate groups” test)
  • at least AUD50m (under the “Acquisitions by very large corporate groups” test).

Similar acquisitions in the last three years

• For the threshold relating to the cumulative Australian turnover of the target and similar acquisitions over the past three years:

1. A similar acquisition is one that relates to the same or substitutable goods or services.
2. The turnover attributable to previous acquisitions is the Australian turnover as at the contract date of the previous acquisition.
3. Certain acquisitions are excluded from this calculation, namely:

• where the Australian turnover of the target (including each connected entity) was less than AUD2m
• those that were previously notified under the new regime
• those that were not connected to Australia
• share acquisitions where the acquirer has not begun, or cannot begin to control the target company
• assets that have subsequently been divested or disposed of
• if the acquisition is of an asset, it does not have the effect that the acquirer will, or can, acquire all, or substantially all of the assets of a business, and the market value of the asset is less than AUD2m.

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 is 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 regime includes other exceptions to the requirement to notify. These capture the following:

• Acquisitions that do not result in the acquirer obtaining control of the target, including, acquisitions of ≤20% voting power in an Australian listed company, listed scheme or a large unlisted company (subject to the designated classes of share acquisitions, discussed above)
• Internal restructures and reorganizations
• Acquisitions of assets in the ordinary course of business
• Certain land acquisitions, including land acquisitions undertaken in the ordinary course of business (including leases)
• Acquisitions by an administrator, receiver, receiver and manager or liquidator
• Certain acquisitions in financial markets, including debt instruments, financial securities (e.g. dividend reinvestments, derivatives, buy-backs and custodial holdings), security interests, or through financial market infrastructure (e.g. clearing and settlement facilities)
• Acquisitions by superannuation entities involving transfers of members’ benefits between superannuation entities and changes of trustees
• Acquisitions taking place due to testamentary disposition, intestacy or a right of survivorship
• Acquisitions that occur due to the operation of a law of the Commonwealth, or of an Australian state or territory.

What are the review timeframes?

The timelines for review are as follows:

• Waiver (up to 25 business days after the effective notification date): If the ACCC has not decided a waiver application within 25 business days, it must not grant the waiver
• 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 AUD1 billion, and AUD1,595,000 for transactions valued at over AUD1bn. The fee for a public benefit assessment application is an additional AUD401,000.

Forms and waivers

The treasury has finalized both short and long form notification templates as well as the notification waiver form for parties to notify their acquisitions and request the grant of a notification waiver from the ACCC. Parties are encouraged to engage in pre-notification discussions with the ACCC, including to decide whether a long form is required.

Notification waivers are intended to be used where the risk of harm to consumers or competition is low, or where thresholds are unlikely to be met. The grant of a notification waiver from the ACCC exempts a party from notifying their acquisition to the ACCC for a full review, even if thresholds are met. The ACCC expects to deal with the bulk of notification waiver applications quickly. The ACCC has also confirmed that it can consider a waiver application from an acquirer that is a bidder in a competitive bid process on the expectation that the acquirer is actively engaging in the bidding process and intends to complete if they are successful.