Changes to Australia’s merger control regime: everything you need to know

Australia is set to transition to a new merger control regime, with significant changes taking effect from 1 January 2026. These reforms include mandatory notification thresholds, greater filing requirements, and substantial filing fees. Businesses need to prepare now to avoid transaction delays or penalties.

Key points:

• Important aspects of Australia’s new merger control regime – including mandatory notification thresholds, forms and filing fees – have now been finalised.
• From 1 January 2026, certain transactions must be notified to the Australian Competition and Consumer Commission (ACCC) under a new, mandatory process before they can be put into effect.
• Transitional arrangements will apply between 1 July and 31 December 2025 where parties to a transaction may choose to seek ACCC clearance under the pre-existing “informal clearance” process or under the incoming process.
• For transactions currently in contemplation or negotiation – particularly if there is a risk they may complete after 1 January 2026 – it is essential that an appropriate ACCC filing strategy is formulated now.

Current regime

Substantial lessening of competition prohibition: Section 50 of the Competition and Consumer Act 2010 (Cth) (CCA) prohibits any acquisition of shares or assets that would have the effect or likely effect of substantially lessening competition in a market in Australia.

The CCA sets out a non-exhaustive list of factors that must be considered when determining whether an acquisition would substantially lessen competition, which include:

• market concentration;
• the availability of substitutes;
• the height of barriers to entry, countervailing customer/supplier power;
• dynamic characteristics of the market (e.g., growth, innovation and product differentiation);
• the likelihood that the acquisition would result in the acquirer being able to significantly and sustainably increase prices or profit margins; and
• the nature and extent of vertical integration.

Engaging with the regulator: There are currently no mandatory ACCC filing requirements under the CCA. Parties to a proposed transaction must therefore undertake their own analysis and decide whether to engage with the ACCC on a voluntary basis and make the transaction conditional upon ACCC clearance.

If ACCC clearance is not voluntarily sought, then the ACCC may initiate an investigation at any stage and, for a transaction that it considers to be anti-competitive:

• seek an injunction to prevent it from completing; or
• if it has already completed, seek orders requiring the divestiture of the acquired shares or assets and/or imposing penalties.

ACCC clearance is usually sought under the non-statutory “informal clearance” process, which the ACCC itself has developed over many years.

New regime

Mandatory notification thresholds

The new regime is mandatory and suspensory. This means that, from 1 January 2026, a notifiable transaction cannot be put into effect before the ACCC has cleared it. A failure to notify a qualifying transaction renders the relevant acquisition void and the merger parties will also be exposed to significant penalties. The mandatory notification thresholds are revenue- and transaction-value-based. A transaction must be notified if:

1. General thresholds – the combined “Australian revenue” of the acquirer (including its “connected entities”) and the target (including its “connected entities”) is at least $200 million AND either: (i) the “Australian revenue” of the target (including any “connected entities” being acquired) is at least $50 million OR (ii) the “transaction value” is at least $250 million;
2. Very large acquirer thresholds – the “Australian revenue” of the acquirer (including its “connected entities”) is at least $500 million AND the “Australian revenue” of the target (including any “connected entities” being acquired) is at least $10 million; or
3. Three-year accumulated thresholds – either of the above thresholds is met in respect of an acquirer (including its “connected entities”) AND the cumulative “Australian revenue” of the target and any businesses that “predominantly involve the same goods or services…or [substitutable / competitive] goods or services” that were acquired over the previous three-year period is at least $50 million ($10 million if a very large acquirer is involved) – however, acquisitions of targets with less than $2 million “Australian revenue” need not be included in this calculation.

Acquisitions of shares or assets – including any legal and equitable right such as in property – are generally subject to the new regime where the mandatory notification thresholds are crossed.

The general prohibition on acquisitions that substantially lessen competition in section 50 of the CCA will remain in place. However, transactions that are notified to the ACCC are exempt from the operation of section 50, provided they are cleared by the ACCC before being put into effect.

Accordingly, if a transaction does not meet the mandatory notification thresholds but may be substantively anti-competitive, the merger parties may need to notify the ACCC on a voluntary basis.

Key concepts

• Australian revenue: This means that part of an entity’s gross revenue for the most recently ended 12-month financial reporting period that is attributable to transactions or assets within Australia, or transactions into Australia, as determined in accordance with accounting standards (either under the Corporations Act 2001 (Cth) or as adopted by the International Accounting Standards Board, or equivalents). A previous proposal to use current GST turnover for the 12-month period up to the contract date, which was regarded as more complex and less workable, has been abandoned. If it is not reasonably practicable to attribute revenue to an asset that is being acquired, then a figure of 20% of the market value of that asset is to be used.
• Connected entity: This concept is complex and introduces significant uncertainty into the regime. Entities are connected if they are “related” under the CCA (e.g., as a parent, subsidiary or sibling entity) or if there is a relationship of “control” between them under section 50AA of the Corporations Act 2001 (Cth) (including where an entity is able to determine, either alone or with any “associates”, the outcome of another entity’s financial and operating policies). Accordingly, a potentially detailed examination of equity structures, inter-entity agreements and on-the-ground business practice is likely to be required.
• Transaction value: For the purposes of the regime, this is the greater of:

1. 1. the consideration received or receivable for all the relevant shares or assets, and
   2. the sum of the market values of all the relevant shares or assets.

Clearly, in most cases, the two methods will have the same result since the negotiated outcome will itself be determinative of market value. However, in cases where it is known that a transaction will not itself occur at market value then it will be necessary to consider that part of the test.

• Same, substitutable or competitive goods or services: In the context of the three-year accumulated thresholds, this concept again introduces significant complexity and uncertainty. In effect, this will require serial acquirers to consider, potentially in detail, the extent to which certain goods or services are supplied in the same product market(s). In addition, any geographic factors or limitations are explicitly disregarded here such that previously-acquired target revenues may need to be counted even if those targets are plainly competitively irrelevant to a current transaction.

Exceptions to mandatory notification

A range of exceptions apply, including:

• certain land acquisitions;
• acquisitions made in the capacity of an administrator, receiver, receiver and manager, or liquidator;
• certain financial market infrastructure related acquisitions;
• certain acquisitions of financial securities;
• certain acquisitions relating to debt instruments, money lending, financial accommodation, and security interests;
• certain acquisitions by nominees and other trustees; and
• acquisitions that occur by operation of law.

Notification waivers

There will be a “waiver” process under which an acquirer can avoid a formal notification. In assessing waiver applications, the ACCC will consider, amongst other things:

• the likelihood that the acquisition would meet the notification thresholds, and;
• the likelihood that the acquisition would, or would be likely to, substantially lessen competition.

However, the full details of the ACCC’s approach to waivers are not yet available and we expect that, in many cases, it will be a waste of effort and time overall to seek a waiver rather than simply notify and seek a “fast-track” clearance (see further below).

ACCC review process and timeline

Following a formal notification, uncontentious acquisitions (e.g., no or very little competitive overlap) may obtain “fast-track” clearance in as little as 15 working days. The ACCC will otherwise have 30 working days to conduct a “phase 1” review. The ACCC has indicated that it expects to approve approximately 80% of mergers within 20 business days.

If the ACCC is satisfied after its phase 1 review that the merger could substantially lessen competition, then the ACCC will progress to an in-depth “phase 2” review for a further 90 working days.

A non-decision by the ACCC within the statutory timeframes will be deemed to be clearance. However, it is critical to note that these timelines will be subject to an ongoing ACCC ability to “stop the clock” by issuing requests for information or using its compulsory information gathering powers. We expect the ACCC to frequently use these “clock-stoppers” and, accordingly, acquirers will be constantly exposed to timing risks within the process, many of which they will have little or no ability to control.

Transparency and confidentiality: public register

A public register will be established for all merger reviews (although the confidentiality of commercially sensitive information of the parties will be protected). Waiver applications will also be made public.

In practice, this means that:

• all mandatorily notifiable transactions will become public ahead of ACCC clearance, which may not be received until after a protracted period;
• it will no longer be possible for potential acquirers (e.g., bidders in a competitive process) to address merger control risks by engaging with, and obtaining a view from, the ACCC on a confidential basis and ahead of signing, which under the existing informal clearance process is common; and
• undertaking a waiver application process (which will be made public) before execution of transaction documentation may not be practical given parties often need and desire confidentiality as part of the negotiation process.

Further, the public nature of the ACCC’s review will provide significant additional scope for thirdparties (e.g., customers, suppliers and competitors) to involve themselves in the process and, potentially, reduce the likelihood of ACCC clearance (or at least increase the likelihood of a lengthy (and expensive) phase 2 review).

Filing fees

Notifications and waiver applications will carry the following (significant) filing fees:

• Notification waiver application: $8,300
• Phase 1 assessment: $56,800
• Phase 2 assessment (variable based on transaction value): $50 million or less – $475,000; greater than $50 million and up to $1 billion – $855,000; greater than $1 billion – $1,595,000.

These costs will need to be factored into an acquirer’s deal economics. Vendors, particularly in competitive processes, may be unwilling to share in them.

Importantly, the impact of a phase 2 review, and its associated costs, is not limited to large-scale transactions between major corporates: it will be relevant where significant players acquire smaller targets, particularly in the context of industry consolidation.

Substantive ACCC assessment

The ACCC will be required to clear an acquisition unless it reasonably believes that the merger would have the effect, or likely effect, of substantially lessening competition in a market.

The approach to the substantial lessening of competition test outlined in section 2 above will be retained, but with an increased emphasis on acquisitions that create, strengthen or entrench market power.

At the same time, the ACCC will have the power to treat the effect of an acquisition as being the combined effect of that acquisition and other acquisitions that were put into effect during the three years ending on the effective notification date for the current acquisition, the targets of which were involved (directly or indirectly) in the supply or acquisition of the same goods or services or goods or services that are substitutable for, or otherwise competitive with, each other.

Transitional period scenarios

Transaction received informal clearance before 1 July 2025

If the ACCC has already informally cleared a transaction before 1 July 2025 and the transaction will complete by 31 December 2025, no further action is necessary.

If, however, a transaction that has been informally cleared pre-1 July 2025 will not complete by 31 December 2025, then the merger parties will need to request an update from the ACCC to confirm whether it maintains its original view. The ACCC has indicated that requests for an updated view should be made by early October 2025.

If the ACCC maintains its original view, the merger parties will have 12 months from that point to complete the transaction without needing to notify the ACCC under the new regime. Otherwise, a formal notification under the new regime and ACCC clearance pursuant to that regime will be necessary before completion again (if it meets the mandatory notification thresholds).

Transaction is already being reviewed by the ACCC

If the ACCC informally clears a transaction between 1 July 2025 and 31 December 2025, then the applicant does not need to notify under the new regime if the transaction completes within 12 months of the ACCC’s informal clearance. Otherwise, a formal notification under the new regime and ACCC clearance pursuant to that regime will be necessary before completion (if it meets the mandatory notification thresholds).

Not-yet-notified transactions

The ACCC has indicated that informal clearance applications received after early October 2025 may not be determined before 31 December 2025. Accordingly, for transactions that raise substantive competition issues, the merger parties should consider seeking informal clearance as soon as possible or, if the October 2025 timing cannot be met, making a notification under the new regime.

For transactions that do not raise substantive competition issues (and so do not need ACCC informal clearance) but which meet the mandatory notification thresholds, the merger parties may wish to consider accelerating their plans so that completion can occur before 1 January 2026.

Conditions precedent, sunset dates and other terms in transaction documents should be customised to ensure that they appropriately reflect the process and timing of ACCC clearance under the applicable regime.

Get in touch

If you’re in the middle of or contemplating a future transaction, it’s important you have a clear plan for navigating these changes to avoid your transaction being caught up in regulatory red tape. For more information, please contact Alistair Newton.