New era for merger control in Australia

Australia’s new merger control regime has commenced, with a transitional period now in effect from 1 July 2025. The current voluntary regime remains in place until 31 December 2025, after which it will be replaced by a mandatory notification and clearance process.

From 1 January 2026, businesses will be required to notify the Australian Competition and Consumer Commission (ACCC) of certain acquisitions that meet prescribed thresholds and must not complete those transactions without prior ACCC approval. The regime applies to acquisitions of assets, shares, units in a unit trust, and interests in a managed investment scheme.

Parties may also choose to make a voluntary notification - for example, to confirm whether a transaction is notifiable, or where it falls outside the thresholds but could still raise competition concerns.

In June 2025, the Federal Government made the Competition and Consumer (Notification of Acquisitions) Determination 2025 (Determination), which sets out the thresholds and introduces additional targeted notification requirements for major supermarkets.

KEY CONCEPTS

'Connected to Australia'

In order to be notifiable, an acquisition must first be 'connected to Australia', meaning that:

• (a) in relation to the acquisition of a share or other interest in a body corporate, the body corporate carries on a business in Australia; or
• (b) in relation to the acquisition of an asset, the asset is used in, or forms part of, a business carried on in Australia.

Turnover

The turnover of the parties to a transaction is relevant for a number of the thresholds. The test applied is the 'current GST turnover' of the relevant party *plus that of its 'connected entities'. *

The term 'current GST turnover' has the meaning given by the A New Tax System (Goods and Services Tax) Act 1999 (Cth) and refers to the sum of an entity's past 11 months plus the current month's gross income.

'Connected entities'

A 'connected entity' is:

• (a) an 'associated entity' under section 50AAA of the Corporations Act 2001 (Cth) (Corporations Act); and
• (b) an entity that is controlled by the first entity for the purposes of section 50AA of the Corporations Act (this test is modified slightly by subsection 51ABS(2) of the Competition and Consumer Act 2010 (Cth)).

Entities meeting this test but not indirectly acquired in the transaction are excluded from turnover calculations.

3-year 'look back' test

Several thresholds contain a 'look back' test which takes into account acquisitions in the previous 3 years. The criteria are:

• (a) the acquirer, or a connected entity of the acquirer, acquired other shares or assets ('the previous shares or assets') in the previous 3-year period; AND
• (b) both the current shares or assets and the previous shares or assets relate to the carrying on of a business involving the supply or acquisition of comparable goods or services; AND
• (c) the acquisition of the previous shares or assets and the current shares or assets, if treated as a single acquisition, would meet the specified turnover threshold.

Small acquisition

A small acquisition is where the turnover of the target (and its connected entities) is less than $2m.

NOTIFICATION THRESHOLDS

The Determination sets out three 'general circumstances' in which a notification must be made:

Exceptions to general notification thresholds

Acquisitions which do not result in control of the target business, or which result in less than 20% of the voting power in a public listed entity are exempt. There are also exemptions for certain categories of acquisitions. These include acquisitions:

• of land for certain purposes;
• by liquidators, administrators and receivers in insolvency matters;
• arising due to inheritance, intestacy or joint tenancy survivorship;
• of shares resulting from capital raisings, rights issues and buy-backs;
• of security interests over shares or assets in relation to financial accommodation on ordinary commercial terms;
• by nominees and other trustees; and
• of exchange-traded derivatives.

Supermarket sector

Regardless of thresholds, major supermarkets (currently Woolworths and Coles and their connected entities) must notify acquisitions of:

• a supermarket business; or
• land for a supermarket business.

No other sector-specific classes of transactions are specified in the Determination.

Notification Forms

The Determination provides for short and long notification forms, depending on the nature of the transaction. A long form is required for vertical, horizontal or conglomerate acquisition meeting certain criteria. Both forms require disclosure of past relevant acquisitions.

The ACCC proposes that the appropriate form to use for a particular transaction be discussed with the ACCC before the notification is made.

ACCC REVIEW AND DETERMINATION

Phase 1

The ACCC must complete a Phase 1 assessment of a transaction within 30 business days of receiving a notification. It will gather information from the parties and stakeholders. At the end of Phase 1, the ACCC may:

• approve the acquisition;
• approve the acquisition with conditions; or
• issue a Phase 2 notice for further consultation.

The ACCC has indicated that it expects most acquisitions will be approved within Phase 1.

Phase 2

Phase 2 involves a more detailed review which will run for up to 90 business days. By day 25, the ACCC will issue a Notice of Competition Concerns, outlining its preliminary assessment. Parties may respond to the concerns and offer a solution that would permit the acquisition to proceed.

At the conclusion of Phase 2, the ACCC can decide to:

• approve the acquisition;
• approve the acquisition with conditions; or
• refuse approval.

Public Benefits Phase

Following the ACCC's conclusion, parties may apply for a Public Benefit Review if they believe the acquisition delivers a net public benefit. This phase lasts up to 50 business days. The ACCC has indicated that it expects few transactions will proceed to this stage.

Transition Period (1 July – 31 December 2025)

During this period, transaction parties may elect to proceed under the existing informal merger review process or apply under the new regime. However, the ACCC has cautioned that informal requests submitted after early October may not be finalised before the new regime commences.

If the ACCC approves a proposed transaction during the transitional period, parties will remain exempt from the mandatory notification regime provided they:

• receive a clearance letter; and
• complete the transaction within 12 months of receiving the clearance letter.

If a pre-assessment, informal review or public review has not been completed by 31 December 2025, the result will be listed as a 'no decision' on the public register, and the transaction will be subject to the new regime.

FEES

Unlike the current merger review arrangements, the new regime will operate on a cost recovery basis. This means there are now significant fees to be paid in relation to a notification. The filing fees (for mandatory and voluntary notifications) are as follows:

KEY TAKEAWAYS

• Merger clearance is now a factor to be considered in all M&A transactions, impacting the timing and cost of the transaction.
• Parties will need to determine early on whether a transaction is notifiable and whether pre-notification engagement with the ACCC is appropriate.
• The time to rely on the current voluntary clearance arrangements is coming to an end - applications for clearance should be made prior to 1 October 2025.
• If the ACCC cleared an acquisition before 1 July 2025 under the existing regime but the transaction will not complete until after 1 January 2025, an updated informal view should be requested from the ACCC to avoid the application of the new regime.
• Parties to transactions will need to ensure that all information provided to the ACCC as part of the new notification process is complete and not misleading (including notifying the ACCC with respect to any material changes of fact) as failure to do so may incur penalties.
• Deal makers should be conscious that serial small acquisitions over a multi-year period; and acquisitions of relatively small nascent competitors by larger entities, may be notifiable and will likely face increased scrutiny.

It is essential that companies now plan and prepare for the new regime. Our team of experts can assist to navigate the new regime and to determine the best way forward for your merger transactions, including in the transitional period leading up to 1 January 2026.