Following a lengthy advocacy campaign by the Australian Competition and Consumer Commission (ACCC) and detailed consultation processes, the Australian Treasurer has introduced a broad reaching reform package into the parliament to overhaul Australia's merger control regime. We have previously outlined the government's merger reform agenda and the proposed approach to notification thresholds. The protracted debate about the need for merger reform has culminated in the introduction of the Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill 2024.

Immediate reactions and commentary has understandably focused on adjustments made by the government, including changes to respond to feedback from practitioners and business. This includes, for example, a successful campaign by the property industry to exclude certain property transactions from mandatory notification, and measures to target supermarket transactions. However, with the introduction of the final reform package, attention will quickly turn to how the new regime will operate and what it will mean in practice.

Key takeaways from the reform package

We have distilled our immediate takeaways regarding the reform package put to parliament:

• Complexity remains: While the government has taken on board feedback, the proposed regime remains complex and technical. Regardless of the criticisms of the current voluntary regime, the proposed framework is a step change and whether it achieves the government's objectives – 'faster, stronger, simpler, more targeted and more transparent' – will in part depend on how it is implemented and operationalised by the ACCC. The ACCC is investing significant resources to the transition, but we nevertheless expect there will be teething problems.
• Notification thresholds: The notification thresholds will be made by regulation and have not been formally released. However, the Treasurer has announced revised notification thresholds that, significantly, do not include any market concentration limb. The Treasurer has, however, announced additional notification requirements – (1) for all supermarket transactions, and (2) for interests above 20% in an unlisted or private company, if one of the companies involved has turnover more than A$200 million. This is likely to pull a significant volume of additional transactions into the regime and signals that parties should expect further adjustments in thresholds over time. The government's response to the consultation process also indicates it is exploring further targeted screening options.
• Certainty and timing: The regime will impose strict statutory timelines on the ACCC and the ACCC has signalled that it expects to make a decision in about 80% of transactions in 15-20 business days. There remains uncertainty in how this will operate in practice. For example, the ACCC has indicated that it will encourage pre-lodgement engagement to identify additional information that it may require. How the process (including pre-lodgement discussions) is operationalised in practice will determine whether the system is in fact faster and simpler.
• Transitional arrangements are clearer: While some uncertainty remains, we have greater clarity about the transitional arrangements that will apply as Australia moves to a mandatory system. Subject to the Bill passing parliament, the intention is that the regime will commence on 1 January 2026. Parties will be able to voluntarily opt-in to the system from 1 July 2025. Provided deals are completed within 12 months, no further notification will be required where the ACCC has decided to not object to a transaction between 1 July and 31 December 2025. Further detail is required about the treatment of ACCC reviews that are ongoing as at 31 December 2025.

Features of the proposed process

Key features of the proposed merger control regime in Australia include the following:

• Mandatory and suspensory: The current notification regime will be replaced by a mandatory and suspensory merger control process with the ACCC as primary decision maker and custodian of the regime. Under the single merger control system (replacing the current bifurcated voluntary regime and statutory merger authorisation process), businesses must notify the ACCC and receive clearance where an acquisition meets certain thresholds.

If a party fails to notify a deal that meets the thresholds, the transaction will be declared void and significant penalties may apply. In responding to the introduction of the package, the ACCC has indicated that resources will be directed to active monitoring for non-compliances to ensure that the benefits of the new regime are realised.

• Acquisitions that will be caught: There is complexity in the detail, but the regime will continue to apply to the acquisition of shares or assets. The concept of an 'asset' extends to cover any kind of property, legal or equitable rights (subject to some exceptions), as well as interests in land, and certain IP rights including patents.

While the government has not yet announced the scope of the exception, the Treasurer has flagged a carve out for land acquisitions involving residential property development and certain commercial property acquisitions.

There are certain classes of acquisitions that will not need to be notified. This includes transactions that do not result in 'control' of an entity. This is an area of the draft package that was subject to considerable feedback that the government has taken on board, aligning the legislation with the concept of 'control' in the Corporations Act.

• Notification thresholds: To enable greater flexibility, the notification thresholds will be set by regulation. While the package released by the Treasurer did not include proposed regulations, the government's revised approach to the thresholds has captured significant attention. Notably, the regime will not include any market concentration threshold. While advocacy efforts had focused on the need for concentration thresholds as a 'backstop' to capture potentially harmful transactions, concentration thresholds would have introduced a further layer of complexity and a material risk in the event that the ACCC formed a different view about the parameters of the relevant market(s).

Instead, the government has announced three core notification thresholds:

• A general economy-wide threshold to capture acquisitions where the Australian turnover of the combined businesses is above A$200M, and either the business or assets being acquired has Australian turnover above A$50M or global transaction value above A$250M.
• A threshold directed at large acquirers which will catch acquisitions by large businesses with Australian turnover more than A$500M acquiring a smaller business or assets with Australian turnover above A$10M.
• To target serial or 'creeping' acquisitions, all acquisitions by businesses with combined Australian turnover of more than A$200M where the cumulative Australian turnover from acquisitions involving the same or similar goods or services over a 3 year period is at least A$50M (or A$10M if a very large business is involved). Small acquisitions where the target has <A$2M turnover would be excluded from this threshold.

In addition to the core notification thresholds, the government also announced two targeted thresholds:

• All acquisitions in the supermarket sector.

• Acquisitions of an interest above 20% in an unlisted or private company, if one of the companies involved in the acquisition has turnover more than A$200 million.

The targeted thresholds illustrate the potential trajectory of merger control in Australia, with specific arrangements to focus on particular areas of the economy. The government's decision to single out the supermarket sector is consistent with the recent political and regulatory focus on that industry. The additional threshold for unlisted and private companies was flagged by the Treasurer as being made at the request of the ACCC Chair to enable the ACCC to scrutinise private markets investments. In circumstances where there is no market concentration test, this additional threshold has the potential to capture a significant number of deals, including many PE transactions.

Each of the thresholds will be subject to an Australian connection or nexus requirement where the target must be carrying on business in Australia (or have plans to do so). The government has also flagged that a further low-cost screening mechanism is also being considered in order to quickly identify particular sectors or regions of interest.

• ACCC timelines: We have previously addressed the timelines for ACCC review – they are: (1) a 'fast track' assessment process in 15 business days, (2) 30 business days for a Phase 1 review, (3) a further 90 business days for a Phase 2 review, and (4) a further 50 business days if the parties seek to rely on the public benefits of a deal (enabling a net public benefit test currently available under the merger authorisation process).

The legislative package also includes a notification waiver process that parties will be able to use to request the ACCC to relieve them of the obligation to notify an acquisition. This is intended to provide additional flexibility.

The government has also sought to address feedback from business regarding scope for the ACCC to 'stop the clock'. The ACCC has indicated that it intends to make a determination for around 80% of mergers within 15 to 20 business days. However, the time involved in obtaining regulatory clearance will be driven by the ACCC and how its processes evolve, including the extent of, and time required for, pre-lodgement engagement with the ACCC.

• Review mechanisms: While the immediate focus will be on adjustments to the ACCC notification process, the government has also made changes to appeal / review mechanisms to the Australian Competition Tribunal. In response to feedback, the government has broadened the limited merits review mechanism to the Tribunal to enable the parties, in some circumstances, to rely on new evidence and documents that was not before the ACCC.

• Intersection with FDI: The amendments to the proposed merger control regime do not impact Australia's FDI regime that is regulated by the Foreign Investment Review Board (FIRB). Parties subject to Australia's FDI regime will need to consider separate notification requirements to FIRB and also whether ACCC notification is required.

• Transitional arrangements: There is now greater clarity regarding transitional arrangements as we work toward the new regime commencing on 1 January 2026. In particular:

• Merger authorisations applications will be accepted up until 30 June 2025. Applications lodged by 30 June 2025 will continue to be considered until the ACCC (or Tribunal) makes a determination on the application.
• No additional notification will be required for mergers that the ACCC does not object to under the current system between 1 July and 31 December 2025 where they are completed within 12 months of the decision.
• For informal merger reviews that are ongoing as at 31 December 2025, the ACCC will continue engaging with merger parties and third parties as the review transitions over to the new regime from 1 January 2026. We expect that the ACCC will provide further detail in 2025 as we work toward the new regime.
• The new mandatory and suspensory regime will commence on 1 January 2026. However, parties will be able to voluntarily notify under the new regime from 1 July 2025.

Next steps for the reform package

While the reform package still needs to pass through parliament, the ACCC has already commenced work to prepare for the implementation of the new system. The ACCC has indicated that it will consult on guidelines regarding its processes and notification materials during the course of Q1 2025 before voluntary notifications begin from 1 July 2025.

The underlying regulations addressing matters including filing fees and the final form of the notification thresholds will be released once the legislative package has passed parliament. The precise form of the thresholds will be key.

We are working with clients and business groups to prepare for the reforms. Get in touch with our national Competition Team if you have questions.