Replacing a well understood and relatively predictable voluntary notification regime, the expansive new regime
captures a wider range of transactions, with noncompliance involving a highly consequential ‘stick’:
automatic voidness. The risk of a transaction being deemed automatically void, as if it never occurred, is a
heavy-handed outcome where reasonable minds can differ over how the complex regime applies. In practice, this is
weighing on decision making for parties and advisors and tending towards a highly conservative lens being applied.
Whether this is ultimately a 'good' thing for the regime, or for routine transactions in the economy, remains to be
seen. But it is leading, as expected, to relatively high volumes of filings already.
With nearly 85 transactions coming before the ACCC since filings opened, a similar level of filings every two months
would translate into roughly 510 transactions each year. On its face this sits just over Treasury's expectations
that some 300 to 500 deals per year would be subject to ACCC scrutiny, but current numbers may understate normal
volumes. This is because many parties took advantage of transitional clearance mechanisms under the old regime for
deals closing in 2026, thereby avoiding a filing under the new regime.
At the end of February, there have been 41 waiver applications – with waivers being the shortest and least
costly path for managing risk under the new regime. The vast majority of these have been 'waived' through in under
15 business days, and even more quickly in many cases. This speed is matching the ACCC's commitment to clear 80% of
transactions within 15 to 20 business days, and should be viewed as a positive start. It should also provide some
baseline comfort to dealmakers that, with the right circumstances and application, deal timelines may not be
impacted.
But not all deals have had a calm start, with the ACCC declining three waivers already, in varying circumstances. An ACCC decision to decline a waiver pushes the parties into needing to 'restart' under the notification pathway. The risk of being pushed back to square one will see some parties hesitate on pursuing a waiver, even in straightforward cases, and opt to notify just for 'certainty'. That adds time, and cost, to transactions that might otherwise have been avoided, and which likely would not have warranted ACCC clearance under the old regime.
This has translated into notification numbers being broadly on par with waivers, sitting at 43 applications at the end of February. Two of these have been pushed into a deep dive Phase 2 review. The prospect of such a review is becoming a key focus for vendors when evaluating bidders and deal certainty, and indeed, for some, the significant statutory fees and extended scrutiny of a Phase 2 will weigh against proceeding with some bidders. For low value deals, it may even weigh against proceeding at all.
Deal documentation is already evolving to address the risk, and cost, of waiver decline and extended review, including via termination rights and risk allocation mechanisms. And pressure to address risk is coming from all sides, including financiers, to steer clear of the chaos that would arise from a voiding outcome.
Despite new processes and new risks, most transactions should navigate relatively smoothly through the streamlined waiver process or a Phase 1 public review. But success requires an early and realistic assessment of regulatory risk and pathways, and transaction structures accommodating potential delays or complications.
