Australia’s new merger regime

September 2025 | SPOTLIGHT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

September 2025 Issue

The Australian Competition and Consumer Commission (ACCC) has long expressed concerns about increasing levels of concentration in the Australian economy, and the difficulties it has faced in curtailing this through the merger review process. Citing issues related to process, evidentiary thresholds, the global regulatory landscape, and visibility over the suite of transactions that may have an anti-competitive impact in the Australian market, the ACCC made a sustained case for significant regulatory reform.

Following several government inquiries and consultation with the legal and business communities, the Australian government has passed a suite of merger law reforms. These reforms represent the largest wholesale reshaping of the Australian merger law in decades and will have profound impacts for businesses seeking to do deals in Australia and their legal advisers.

This article seeks to provide background to these significant changes and set out the key points and practicalities of the new regime.

Why is the current voluntary merger regime being phased out?

The Australian merger regime is set out in the Competition and Consumer Act 2010 (Cth) (CCA) and is administered and enforced by the ACCC. Currently, the Australian merger process is voluntary and non-suspensory, with no mandatory notification thresholds.

Further, the ACCC has no power to prevent a merger or acquisition from proceeding without obtaining a court order. This is a relatively uncommon occurrence. Since the introduction of the current merger test, the ACCC has only taken nine actions against merger parties after the completion of a contested merger and has only been successful in one. This is in part because where the ACCC expresses concerns or indicates that it will oppose a merger, the parties typically will abandon the deal or offer structural remedies such as divestments to address the ACCC’s concerns.

Driven in part by the lack of success in contested merger cases, ongoing public scrutiny of privatisation of public infrastructure, consolidation of consumer-facing industries such as banking and supermarkets, and the tendency in smaller economies such as Australia for concentration levels to naturally trend high, the ACCC considers that the current voluntary merger notification model is no longer fit for purpose. The ACCC is especially concerned that the current merger regime does not adequately prevent harm to Australian markets (and consumers) given that the anti-competitive effects of an acquisition are often irreversible, and ex post enforcement is an insufficient remedy.

The ACCC considered there were various shortcomings with the current voluntary merger regime, including that the regime was skewed toward clearing acquisitions. If the ACCC seeks an injunction for a merger it claims is anti-competitive, it bears the onus of establishing that the alleged anti-competitive effects are ‘likely’. The standard of proof required by Australian law to be established is ‘the balance of probabilities’. The ACCC has identified the inherent uncertainty in predicting what is likely to happen in the future as making it difficult to block anti-competitive mergers.

The regime also allows businesses to complete deals without notifying the ACCC even if they may breach competition law. The ACCC considers that many deals have been completed that it did not know about and did not have any opportunity to assess, resulting in harmful consolidation in Australian markets.

The ACCC also considered that the regime did not adequately deal with killer acquisitions and creeping acquisitions. The ACCC has repeatedly expressed concerns that the current Australian regime does not adequately allow it to assess the cumulative impact of acquisitions which, on their own, may not lessen or substantially lessen competition. This concern was particularly acute in the context of digital platforms and emerging technologies.

Further, the regime was out of step with Organisation for Economic Co-operation and Development (OECD) counterparts. Until the recent merger reforms, Australia was one of only three OECD countries that did not have a mandatory merger notification regime. The ACCC has argued this resulted in Australian merger notification being deprioritised in the context of global deals.

These views are broadly aligned with the global trend toward scrutiny of the effectiveness of competition regimes and merger control and reflect a broader policy concern over increasing consolidation.

Overview of the new merger regime

After an extensive consultation process and consideration of the ACCC’s concerns, the Australian government passed the Treasury Amendment Laws (Mergers and Acquisitions Reform) Act in November 2024.

The newly legislated merger regime is mandatory in that parties must notify the ACCC before completing any acquisition that meets the designated thresholds. It will also be suspensory, with implementation of notifiable mergers prohibited until the ACCC grants approval. The regime is also backward looking, considering all similar acquisitions by an acquirer in the three years prior to a deal to determine whether a deal is notifiable. A deal may be notifiable even if previous mergers were not individually notifiable and the ACCC will take into account these previous relevant mergers in assessing the likely effect of a notifiable transaction.

Further, the new regime will be costly, with notification fees ranging from A$56,800 to upwards of A$1.6m, with a limited exemption for small businesses. Notifications will also be made public, with transactions no longer able to be notified to the ACCC on a confidential basis. Penalties for failing to notify the ACCC of a notifiable acquisition or putting into effect an acquisition before the ACCC makes its determination, will carry penalties of up to $50m or 30 percent for corporations and $2.5m for individuals.

Which deals will be caught?

The new merger regime will capture acquisitions of shares or assets that are connected with Australia, meet certain monetary thresholds (or occur in certain industries), result in a change of control and are not subject to an exemption. A business will be ‘connected’ with Australia if the share is in the capital of a body corporate, or that asset is an interest, used in or forms part of, a business carried on in Australia.

There are three key monetary thresholds to be aware of.

First, for acquisitions resulting in large or larger corporate groups, whether the merger parties have a combined Australian revenue equal to or greater than A$200m and either the target business or assets being acquired have an Australian revenue equal to or greater than A$50m or the transaction has a market value, or the consideration paid, is equal to or greater than A$250m.

Second, for acquisitions by very large corporate groups, a deal will be notifiable if the acquirer has an Australian revenue equal to or greater than A$500m and the target business or assets being acquired have an Australian revenue equal to or greater than A$10m.

Third, for creeping or serial acquisitions, a deal will meet the threshold if the acquirer has an Australian revenue equal to or greater than A$200m and a cumulative Australian revenue from acquisitions made by the acquirer in the three years prior to the notification date is equal to or greater than A$50m or equal to or greater than A$10m if the acquirer has an Australian revenue equal to or greater than A$500m. This applies where the acquisitions made by the acquirer in the prior three years are for the same or substitutable goods or services in Australia.

Notably, the concept of ‘Australian revenue’ includes ‘connected entities’ of the acquirer or the target where relevant. It is a broad concept capturing both related entities and entities over which control is achieved, either alone, or with associates.

Change of control. An important exception under the updated regime is that notification requirements do not apply when the purchasing party will lack control over the acquired entity following the transaction, or in situations where the buyer already controls the target company prior to the deal being implemented.

Whether a transaction results in a change of control is determined by a complex test based on the concept of ‘control’ under corporations law. In effect, the test requires consideration of the level of practical influence or control the acquirer will have over the target’s financial and operational decision making, including control held jointly with a third party. This test is also subject to some specific exemptions.

Designated industries. The new merger regime allows the Australian government to ‘designate’ certain acquisitions that must be notified, regardless of whether monetary thresholds are met. This provision is designed to allow the ACCC to police acquisitions in particularly sensitive or important industries. To date, only acquisitions by the two major supermarkets in Australia have been ‘designated’ as notifiable. However, the government has previously considered designating transactions in other consumer-facing sectors such as fuel, oncology and radiology.

Notification and information production. Following notification, the ACCC will conduct a formal assessment for an initial period of 30 business days (which in some circumstances is subject to extension). The fact of this notification will be recorded on a public register. This register will record the identities of the parties, the nature of the transaction, and the ACCC’s decision and progress.

While not set out in detail in this article, the new merger regime processes will require parties to produce significant volumes of material to the ACCC on filing. This differs from the iterative approach to information production under the voluntary regime.

Practical implications

Australia’s merger reforms will come into force mandatorily from 1 January 2026 and are currently optional for merger parties. We anticipate the new merger regime will mean higher costs and longer timeframes for acquisitions. Merger parties must provide more information at an earlier stage and may need to allow more time to engage with the ACCC pre-notification if there are any difficulties in satisfying the relevant information requirements or navigating the uncertainties inherent in a competitive bid process.

Further, acquisitions by large players may be more difficult. Large market players and private equity (PE) firms that make rolling acquisitions in key sectors such as healthcare and technology may face challenges in having even small deals approved. These businesses may need to focus on adjacent sectors to pursue growth.

We also anticipate that the ACCC’s ability to review a business’s acquisition history over the past three years when evaluating a new proposal will impact players such as PE firms. This retrospective scrutiny could disrupt acquisition pipelines, with the potential for past transactions to influence new proposals, even when earlier deals were not subject to notification under the current informal regime.

Companies will also need to evaluate their approaches to M&A in light of updated notification requirements and possible regulatory examination. These changes may influence deal pricing, transaction architecture and how risks are distributed in legal agreements. It will also be worthwhile considering that the ACCC will have the authority to make proposed transactions publicly available, potentially undermining confidential deal negotiations and market confidence through premature media attention and opposition from various stakeholders.

Finally, merger parties should remain aware that acquisitions that fall below the notifiable thresholds may still raise competition issues under other provisions of the CCA, breaches of which can also carry multimillion-dollar personal and corporate penalties and possible imprisonment (for serious criminal cartels). Merger parties should continue to seek external counsel advice to consider relevant competition risks, even absent meeting the mandatory notification requirements.

Sar Katdare and Jennifer Dean are partners, and Morgan Blaschke Broad is a senior associate, at Johnson Winter Slattery. Mr Katdare can be contacted on +61 2 8274 9554 or by email: sar.katdare@jws.com.au. Ms Dean can be contacted on +61 2 9392 7476 or by email: jennifer.dean@jws.com.au. Ms Blaschke Broad can be contacted on +61 2 8247 9647 or by email: morgan.blaschke-broad@jws.com.au.

Sar Katdare, Jennifer Dean and Morgan Blaschke Broad

Johnson Winter Slattery