ACCC’s new merger control regime
Business Law: 07 November 2025
Author: Lachlan Scott - Our People
Please note that all information in this article is of a general nature and does not constitute legal advice.
Starting 1 January 2026, Australia will introduce a new merger control regime requiring certain acquisitions to be notified to and approved by the Australian Competition and Consumer Commission (ACCC) before completion can occur.
What’s changing?
Currently, there is no mandatory requirement to notify the ACCC of a proposed merger or acquisition.
The ACCC does have powers under the Competition and Consumer Act 2010 (Cth) (Act) to investigate and take action to stop or unwind an acquisition where the ACCC believes that such acquisition would (or is likely to) result in a substantial lessening of competition. However, these powers have often been exercised retrospectively due to the ACCC not becoming aware of an acquisition until after its completion, which, in practice, also limited the ACCC’s power to impose conditions or take drastic action – in theory, the ACCC can unwind transactions, but this can be difficult to once assets, employees, leases and other third party contracts have changed hands.
Of course, under the old regime, parties could voluntary notify the ACCC and seek pre‑approval to a proposed acquisition, but this process was not often utilised.
A shift to mandatory notification under the new merge control regime aims to ensure that the ACCC is aware of transactions caught by the regime (and ensure that anti‑competitive transactions are either not approved or appropriate safeguards are put in place) before completion.
Another key change is the focus on “creeping” or “serial acquisitions”, where multiple businesses in the same or similar market sector are acquired over time pursuant to separate transactions. Such transactions, when viewed in isolation, are unlikely to result in a substantial lessening of competition (and were therefore not caught by the old regime), but, taken together, have potential to consolidate the acquirer’s market power and reduce competition.
Are there transitional provisions?
Until 31 December 2025, notification under the new regime is voluntary. This means that there is no requirement to notify the ACCC of proposed transaction, regardless of whether the transaction is caught by one or more of the qualifying thresholds/triggers for notification, provided that such transaction completes on or before 31 December 2025.
Notwithstanding, parties may wish to consider notifying the ACCC, in particular if there is a risk of completion being delayed until after 31 December 2025. There are wait times associated with the notification and associated process (discussed in more detail below – notifying now will put you in the queue and mitigate any further delays.
From 1 January 2025, the regime will become mandatory. There will be an implied condition precedent to all transactions caught by the regime that completion is subject to approval of the ACCC (and that completion must be suspended until such approval is obtained). This is the case even if transaction documents were signed before 1 January 2025.
Importantly, the old regime (which asks whether a transaction is likely to result in a substantial lessening of competition), will continue to apply to all transactions. Parties must remain mindful of this.
What are the thresholds/triggers for notification?
There are several thresholds/triggers that can result in a transaction being caught by the new regime and, in turn, a requirement to notify and obtain approval of the ACCC. Each of these is summarised below. [AP1] For clarity, so long as at least one threshold/trigger applies, a transaction will be caught. It also does not matter whether the transaction is by way of sale of assets or shares.
Economy wide threshold
If the combined turnover of the acquirer (including its connected entities) and the target is at least $200M AND either:
- the target has a turnover of at least $50M; OR
- the transaction value is at least $250M,
then the transaction will be caught by the regime.
Additional threshold for very large businesses
If the turnover of the acquirer (including its connected entities) is at least $500M AND the target has a turnover at least $10M, then the transaction will be caught by the regime.
Serial acquisitions
As outlined above, the new regime has included provisions to capture “creeping” or “serial acquisitions”. These allow the ACCC to assess transactions on a global basis, in context of previous transactions entered into by the acquirer, rather than only on an individual‑only basis (which was the case under the old regime).
There are two circumstances in which a transaction can be caught under threshold/trigger.
- If the combined turnover of the acquirer (including its connected entities) and the target is at least $200M AND the cumulative turnover of any other businesses previously acquired by the acquirer over the last 3 years is at least $50M, then the transaction will be caught by the regime.
- If the turnover of the acquirer (including its connected entities) is at least $500M AND the cumulative turnover of any other businesses previously acquired by the acquirer over the last 3 years is at least $10M, then the transaction will be captured by the regime, and notification is required.
Consumer critical market sectors
The ACCC has power to designate that certain kinds of transactions be caught regardless of the turnover of the parties or the transaction value.
The ACCC has indicated that transactions in relation to the following market sectors (which the ACCC deems consumer critical market sectors) are likely become subject to such regulation:
- supermarkets;
- land acquisitions for supermarkets
- fast-moving consumer goods
- utilities/energy
- digital platforms;
- construction; and
- pharmaceuticals.
Are there any exceptions?
There are three notable exceptions. If at least one of these applies, a transaction may not be caught by the regime (subject to the Act and the transaction not being in relation to a consumer critical market sector), in which case notification to and approval of the ACCC would not be required.[AP2]
No ability to control
A transaction may be exempt if, immediately after the acquisition, the acquirer will not “control” (within the meaning of the Corporations Act 2001 (Cth)) the target. Most commonly, this would be because the acquirer does not have the ability to control the board of directors, cast more than 50% of the votes at meetings or to otherwise exert practical influence over the target.
Less than 20% of shares acquired
A transaction may be exempt if the transaction will not result in the acquirer acquiring more than 20% of voting shares (or other voting rights/securities) in the target.
Less than 100% of shares acquired
If the acquirer already holds more than 20% of the voting shares (or other voting rights/securities) in the target and wishes to acquire further voting shares, the transaction may not need to be notified unless the transaction will result in the acquirer acquiring 100% of the voting shares in the target.
What is the approval process and timelines?
There are two phases to the ACCC’s review of an application.
Phase 1 can take up to 30 business days. This comprises an initial review of the application. If competition concerns are identified, the application will proceed to Phase 2. This involves a more in depth review and can take up to 90 business days. Parties may be asked to make submissions or propose potential remedies to address any competition concerns that the ACCC has. In addition to straight approval or rejection, the ACCC may also determine to approve a transaction subject to certain specified conditions.
If an application is rejected (or approved subject to certain conditions which are not palatable to the parties), there is a public benefits assessment that can be applied for. This requires the parties to demonstrate that the acquisition is likely to result in a benefit to the public AND that such benefit would outweigh any likely detriment.
For completeness, an application cannot be made until there is a clear intention between the parties to proceed with the proposed transaction, usually in the form of a signed Term Sheet or Agreement – speculative transactions cannot be notified. However, the ACCC does encourage pre‑notification engagement to discuss possible issues, information they may require and timing.
What fees apply?
The fees applicable to each Phase are as follows:
Phase 1 |
$56,800 |
Phase 2 |
|
Public Benefit Assessment |
$401,000 |
Notification Waiver |
$8,300 |
There is a small business exception that may be available to notifying parties with an aggregated turnover of less than $10M.
Penalties
There are significant penalties for failure to comply with the new merger control regime.
For corporations, the maximum penalty is the greater of:
- $50M; or
- three times the benefit derived from the breach (or 30% of the corporation’s adjusted turnover during the breach period where unable to ascertain the value of the benefit).
It is also possible for the ACCC to pursue individuals involved in the breach (up to a maximum of $2.5M) and/or to seek to unwind transactions which were not approved in accordance with the requirements of the regime.
If you would like any assistance with the above, please call our office on 03 8600 6000.