The transition to mandatory merger control in Australia – key parameters of the new regime

Australia's transition from a voluntary to a mandatory merger regime has formally commenced. Mandatory approval of transactions that meet notification thresholds is required from 1 January 2026. To facilitate the transition, the Australian Competition and Consumer Commission (ACCC) will now accept applications under the new regime. Any transactions that are not completed before the end of 2025 may need to engage now with the new regime to ensure timely completion.

Key takeaways

• Transactions that have a nexus to Australia and meet certain monetary thresholds will require prior approval from the ACCC before completion unless exempt.
• Until 1 October 2025 acquirers can choose between the existing voluntary regime or the new regime. After this date, transactions which meet the filing thresholds and will complete after 31 December 2025 must be approved under the new regime prior to completion.
• The legislation is highly prescriptive, meaning careful analysis is required for key concepts such as the meaning of "control", the calculation of revenue and the application of numerous exceptions.
• The ramifications for failing to file a notifiable transaction are significant, including that the transaction is deemed void as well as financial penalties for both corporations and individuals.
   

This update provides an overview of the key features of the regime and the implications for transactions.¹

What types of acquisitions need to be notified

The scope of acquisitions requiring notification is deliberately broad, and captures acquisitions of shares or assets, including land, property, legal or equitable rights, units in a unit trust and interests in managed investment schemes.

An acquisition must give rise to "control" over the target and the target must be "carrying on a business in Australia".

There are exceptions to filing, including for certain land acquisitions, acquisitions in an administrator or receiver capacity, rights issues, authorised buy backs, certain debt instruments and certain financial markets transactions.  
 

What are the notification thresholds

Where a transaction meets one of the following monetary thresholds, it must be notified for approval by the ACCC prior to completion.

1. Acquisitions resulting in large or larger corporate groups

• The sum of the revenue of the acquirer and target is $200 million or more; and either

  • the revenue of the target is $50 million or more ($50 million test); or

    the transaction value (based on the greater between market value or consideration) is $250 million or more.

OR

2. Acquisitions by very large corporate groups

• The revenue of the acquirer and their connected entities is $500 million or more; and
  • The revenue of the target is $10 million or more ($10 million test).

OR

3. Creeping or serial acquisitions

When determining whether the $50 million test or the $10 million test is satisfied, the parties must treat the current target and all previous shares or assets acquired by the acquirer in the preceding three years, that relate to the supply or acquisition of the same or substitutable goods or services, as one acquisition. This limb does not apply where the current target has less than $2 million in revenue. Similarly, acquisitions of prior targets with revenue less than $2 million or which were previously notified are excluded from the calculation.

How is revenue calculated

Australian revenue

Revenue is to include gross revenue attributable to transactions or assets in Australia or transactions into Australia for the most recent twelve-month financial reporting period prior to the signing date of the transaction.

Revenue of all "connected entities"

The underlying principle behind the revenue calculation methodology is that the revenue to be considered is that of (a) the Acquirer group and (b) the Target, but not the Seller group.

The Acquirer's revenue includes the revenue of the "principal party" to the transaction (i.e. acquiring entity) and the principal party's "connected entities."

Similarly, if the target is a body corporate, the Target's revenue will also include the target and the target's "connected entities" excluding any entities which are not being indirectly acquired through the transaction.

A "connected entity" is:

• any entity that is a subsidiary, holding company or related body corporate of the acquiring entity or the target;² and
• any entity that either (i) controls; (ii) is controlled by; or (iii) is under common control with, the acquiring entity or the target.

Control is relevant both to identifying where there is a notifiable acquisition and to what constitutes a "connected entity" and has been defined broadly consistently with the Corporations Act 2001.

An entity will also be taken to control a second entity where it controls it either alone or together with one or more associates within the meaning of Chapter 6 of the Corporations Act 2001.

Designated transactions

The legislation empowers the Government to designate certain types of transactions as requiring notification. Initially Australia's two major supermarket chains have been singled out such that any transaction of another supermarket they undertake must be notified. We anticipate that this power will be used either to designate additional sectors (digital platforms, liquor and oncology have previously been discussed) or to fine tune the filing thresholds.

What are the review timeframes

The timelines for review are as follows:

• Waiver: Up to 20 business days after the effective notification date, noting that the waiver process will only commence on 1 January 2026 and final details have not been published.
• Phase I determination: Up to 30 business days after the effective notification date, with the earliest that the ACCC can approve a transaction is after 15 business days.
• Phase 2 determination: If the ACCC is satisfied that the acquisition could have the effect or be likely to have the effect of substantially lessening competition, a Phase 2 review will commence at the end of the Phase I period and end up to 90 business days after this date.

These timeframes can shift where there has been a material change of fact impacting the review, the notifying party agrees with the ACCC to extend the deadline for review or if the notifying party requests an extension of time to respond to ACCC concerns.

What are the filing fees

A notification or application must be accompanied by the appropriate fee to commence the ACCC's review.

Long and short form notifications

The new regime requires merger parties to use either a short form or long form notification, depending on whether the following criteria are met.

Long form criteria

Transactions involving the following estimated combined market shares post-acquisition should be notified with a long form notification:

Short form notifications will require information about the parties, the transaction, the overlapping goods or services, past acquisitions, customer and competitor contact information and information on any goodwill protection provisions. The long form notification  involves significantly more extensive documentation requirements, including internal records and economic data, and will often necessitate the early involvement of economists prior to submitting an application.

Merger parties will need to navigate new process requirements

The new regime has changed a number of the procedural aspects engaging with the ACCC, including:

A merely speculative transaction cannot be notified: In order to lodge a notification of an acquisition at least one of the following must apply:

• a contract, arrangement or understanding has been entered into
• there is a manifest intention to enter into a proposed contract, arrangement or understanding
• the acquisition is to be a takeover bid and meets certain conditions
• the acquisition is to take place via a scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth) and the arrangement has been publicly proposed

Pre-notification engagement is expected: The ACCC expects merger parties to engage in pre-notification discussions, in some cases by providing a draft notification for discussion. The pre-notification process falls outside the statutory timeline and may extend the review timeline for a proposed acquisition. 

Transactions will be made public on the Acquisitions Register: The ACCC will maintain a public Acquisitions Register of all notified acquisitions, determinations and reasons on the ACCC's website making the majority of the transactions subject to review public.

Voluntary notification can still be made: Transactions can be voluntarily notified if they fall below the mandatory thresholds and where the parties consider that there are substantial competition concerns. Any transactions voluntarily notified under the new regime are subject to the same requirements as transactions mandatorily notified.

Conclusion

The new merger regime brings significant changes to the regulatory landscape in Australia. As the ACCC adapts to these new processes and the workability of the regime in its initial form is assessed, there may still be some refinement. It is imperative that corporations stay informed and be prepared to meet the new requirements so as to maximise the likelihood of an efficient review process to meet completion timelines.

_{1 This update is not intended to provide a detailed analysis of all aspects of the mandatory merger control regime. The regime has complex nuances and this information should be used as a high level guide only.
2 As identified in section 4A of the Competition & Consumer Act 2010 (Cth).
3 The circumstances where this notification will be used are subject to further guidance from the ACCC.}

_{White & Case means the international legal practice comprising White & Case LLP, a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and entities.}

_{This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.}

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