Australia’s new mandatory merger control regime

Deals closing in Q3 and Q4 of 2025 and beyond

Is it an acquisition within the scope of the regime?

Acquisitions of the following are within scope:

• Acquisitions that are ‘connected with Australia’ (that is, involves the acquisition of shares in or assets of or used in an entity that carries on business in Australia)
• Results in the acquirer obtaining control of the target, that is, the capacity to determine the outcome of decisions about the second entity’s financial and operating policies
• Assets, including legal or equitable interests in tangible or intangible assets, property, land, goodwill, intellectual property rights or partial interests in assets
• Shares
• Units in a unit trust
• Interests in managed investment schemes

Acquisitions that do not fall within the scope of the regime

Acquisitions of the following are outside the scope:

• Acquisitions that are not connected with Australia.
• Acquisitions that do not result in the acquirer obtaining control of the target.
• Internal restructures and re-organisations.
• Acquisitions of assets in the ordinary course of business.
• Certain land acquisitions for residential or commercial property development activity.
• Acquisitions by an administrator, receiver, receiver and manager or liquidator.
• Acquisitions pursuant to succession (e.g. testamentary disposition, intestacy or right of survivorship).
• Certain financial acquisitions including the taking of security, acquisitions of interests in securities, acquisitions of exchange traded derivatives and acquisitions in relation to capital raising (e.g. rights issues, dividend reinvestment, share bonus plans, underwriting of fundraising and buy-backs).

Does the deal trigger the notification thresholds?

What does the process look like?

Step 1: Preliminary consultation with the ACCC.

Step 2: Parties complete and submit a long or short notification form. The long form is required where:

• For acquisitions of a competitor: Estimated market share post-acquisition is:
  • ≥ 40 per cent and the increment resulting from the acquisition is ≥ 2 per cent OR
  • ≥ 20 per cent – 39 per cent and the increment resulting from the acquisition is ≥ 5 per cent
• For acquisitions within supply chains: The party:
  • In the upstream market has a market share ≥ 30 per cent and the other party has a downstream market share of  ≥ 5 per cent
  • In the downstream market has a market share ≥ 30 per cent and the other party has an upstream market share ≥ 5 per cent
• For acquisitions by conglomerate: The parties supply adjacent products or services and one of the parties to the acquisition has a market share ≥ 30 per cent.
• For acquisitions that are otherwise sensitive: Including where the target is a vigorous and effective competitor, is developing a significant product, or where the acquisition is of a business that supplies or controls a key input.

Step 3: The ACCC will confirm if the application is complete (after the filing fee is paid) and the review timeline will begin.

How long will the ACCC review take?

Other important aspects

• The substantive test: The ACCC must be ‘satisfied’ that a notified acquisition would have the effect or likely effect of substantially lessening competition in order to oppose it proceeding.
• To address “creeping acquisitions” the new law:
  • Makes clear that a substantial lessening of competition arising from a merger can include creating, strengthening or entrenching a substantial degree of market power.
  • Enables the ACCC to look at all transactions undertaken by a party to the notified acquisition that are valued at more than $2 million and connected to Australia in the past three years in assessing the impact of the notified acquisition and in applying the thresholds.
• Acquisitions below thresholds: The ACCC will monitor acquisitions and will take appropriate investigatory and enforcement actions in respect of anti-competitive acquisitions, even if they fall below the thresholds for mandatory notification.
• Review will be public: The ACCC will publish the key details of the transaction shortly after receipt of a notification.
• Implications of not notifying: Putting a notifiable transaction into effect (including certain pre-completion coordination with the target/purchaser) without receiving clearance of a notifiable transaction is a breach of the Act and significant penalties may apply. It will also render the transaction void.
• Restraints in sale documents – the ACCC will have the power to review and invalidate restraints if it considers they go further than necessary to protect goodwill.

Appendix 1: Turnover calculation methodology

The approach to calculating turnovers and transaction values is similar to that which applies in many jurisdictions.

1. Calculate the turnover of all parties to the transaction

2. Consider the transaction value 

3. Notes

• In calculating if the target turnover thresholds are met the current acquisition and past acquisitions of the same or similar goods or services within the three-year period need to be treated as one acquisition. However, any acquisitions of targets that had a GST Turnover below $2 million or were not ‘connected to Australia’, can be disregarded.
• In measuring a transaction’s value, the market values of all shares and assets being acquired and the consideration received or receivable for all of the shares and assets being acquired, must be considered.
• The draft proposed filings forms will require reporting of historical turnover for three years.
• Current GST Turnover means the sum of the values of all the supplies that you have made, or are likely to make, during the 12 months ending at the contract date, other than:
  • Supplies that are input taxed
  • Supplies that are not for consideration (and are not taxable supplies under section 72‑5 of A New Tax System (Goods and Services Tax) Act 1999 (Cth)
  • Supplies that are not made in connection with an enterprise that you carry on
• An entity will be a ‘connected entity’ if the principal party controls the second entity (i.e. it has the capacity to determine the outcome of decisions about the second entity’s financial and operating policies) or where the second entity is associated to the first under s 50AAA of the Corporations Act 2001.

• While the preceding notification thresholds apply generally across the economy, certain transactions within the supermarket sector must be notified regardless of whether they meet the general notification thresholds and regardless of whether they result in a change in control.
• Major supermarkets – Coles and Woolworths (including their connected entities) – must notify the ACCC of acquisitions of shares or assets where they are acquiring:
  • A supermarket business (in whole or in part i.e. a business engaged in the retail supply of grocery products).
  • A legal or equitable interest in land (in whole or in part) that meets certain land size requirements (> 700m² for a commercial building or > 1,400m² for land) and is not a lease extension or renewal for land that has a currently operating commercial business.