Australia’s merger reform odyssey: our first look at the final merger reform bill

On 10 October 2024, the Australian Government released the   Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill 2024 (Bill) and  Explanatory Memorandum, marking the most significant reforms to Australia’s merger laws in the 50 years since the introduction of the Trade Practices Act 1974  (Cth), now known as the Competition and Consumer Act 2010 (Cth) (CCA). The law will formally commence on 1 January 2026.

The new merger system moves Australia to a mandatory and suspensory notification administrative regime representing a significant departure from the longstanding voluntary informal clearance process with a judicial enforcement model. 

Prior to formal commencement, merger parties may elect to notify under the new system from 1 July 2025. Grandfathering provisions apply to mergers authorised or granted informal clearance by the ACCC between 1 July and the end of 2025, provided the acquisition is completed within 12 months of the date of authorisation or clearance. 

The legislation follows a government consultation on the  exposure draft  of the Treasury Laws Amendment Bill 2024: Acquisition s released on 24 July 2024 and proposed merger notification thresholds released on 30 August 2024, as we reported on  here and here. 

The government separately published a response to consultation , outlining its response to some of the stakeholder feedback.

The ACCC has also published a statement of goals for merger reform implementation (Statement) outlining its approach to implementing the new regime and to reduce uncertainty during the transition.

This note provides a summary of the practical implications of the Bill, including takeaways from the ACCC’s Statement below. 

What do you need to know?

The Bill sets out the framework for the merger reforms, including:

1. that are put into effect during the 3 years ending on the date the notification is officially received by the ACCC

2. the parties to which include any party to the current acquisition or, if a party to the current acquisition is a body corporate, include a body corporate that is related to that party

3. the targets of which are involved (directly or indirectly) in the supply or acquisition of the same goods or services or goods or services that are substitutable for, or otherwise competitive with, each other (disregarding any geographical factors or limitations). This drafting is a marked improvement from the earlier exposure draft which had referred to firms within the same industry.

4. The object of the CCA.

5. The interests of consumers.

6. If circumstances are determined under the notification thresholds, the likelihood that, if the acquisition was put into effect, those circumstances would apply.  

7. The final date for parties to submit remedy proposals has been extended by 5 business days. The ACCC must not have regard to a commitment or undertaking offered by a party: (1) during Phase 1, if it is offered later than 20 business days after the notification is made, or (2) during Phase 2, it is offered later than the 60th business day after the start of the Phase 2 review period, or if an extension has been granted. 

8. The timeframe for the ACCC to take into account submissions or information has been shortened by 5 business days. The ACCC must not take into account submissions or information received / obtained later than 15 business days before the end of the Phase 2 review period or before the end of the public benefit determination period. The ACCC also has a number of “stop the clock” and rights to extend these timeframes. In addition to the formal, statutory timeframes, the ACCC has also indicated that it is keen for merger parties in complex mergers to also engage in pre-lodgement discussions with the ACCC, including to identify what data and information is kept by the parties and should be produced. At this stage, the length of the pre-lodgement process is unclear.

1. that are put into effect during the 3 years ending on the date the notification is officially received by the ACCC

2. the parties to which include any party to the current acquisition or, if a party to the current acquisition is a body corporate, include a body corporate that is related to that party

3. the targets of which are involved (directly or indirectly) in the supply or acquisition of the same goods or services or goods or services that are substitutable for, or otherwise competitive with, each other (disregarding any geographical factors or limitations). This drafting is a marked improvement from the earlier exposure draft which had referred to firms within the same industry.

1. The object of the CCA.

2. The interests of consumers.

3. If circumstances are determined under the notification thresholds, the likelihood that, if the acquisition was put into effect, those circumstances would apply.  

1. The final date for parties to submit remedy proposals has been extended by 5 business days. The ACCC must not have regard to a commitment or undertaking offered by a party: (1) during Phase 1, if it is offered later than 20 business days after the notification is made, or (2) during Phase 2, it is offered later than the 60th business day after the start of the Phase 2 review period, or if an extension has been granted. 

2. The timeframe for the ACCC to take into account submissions or information has been shortened by 5 business days. The ACCC must not take into account submissions or information received / obtained later than 15 business days before the end of the Phase 2 review period or before the end of the public benefit determination period. The ACCC also has a number of “stop the clock” and rights to extend these timeframes. In addition to the formal, statutory timeframes, the ACCC has also indicated that it is keen for merger parties in complex mergers to also engage in pre-lodgement discussions with the ACCC, including to identify what data and information is kept by the parties and should be produced. At this stage, the length of the pre-lodgement process is unclear.

The timeframe for the ACCC to take into account submissions or information has been shortened by 5 business days. The ACCC must not take into account submissions or information received / obtained later than 15 business days before the end of the Phase 2 review period or before the end of the public benefit determination period. 

The ACCC also has a number of “stop the clock” and rights to extend these timeframes. In addition to the formal, statutory timeframes, the ACCC has also indicated that it is keen for merger parties in complex mergers to also engage in pre-lodgement discussions with the ACCC, including to identify what data and information is kept by the parties and should be produced. At this stage, the length of the pre-lodgement process is unclear.

Fees: the Explanatory Memorandum makes clear that filing fees are likely to be between $50,000-$100,000 per transaction, with exemptions for some small businesses. 

Overall, the changes are constructive and are welcome. In a number of important respects, the Bill responds to concerns raised in relation to the exposure draft legislation and improves both the certainty and workability of the regime. Nevertheless, the new regime will involve a very significant change for business in Australia, resulting in the need for much more significant work upfront.

What has changed since consultation on the exposure draft of the merger reforms?

As outlined above and in the government’s response to consultation, in summary, the key shifts from the exposure draft legislation are:

1. The exemption from the requirement to notify the ACCC for acquisitions that do not result in the acquiring party ‘controlling’ the target party has been tightened and aligned with section 50AA of the CA. The 20% threshold has been maintained.

2. Concerns raised by stakeholders about certain types of transactions (such as hostile takeover deals) have been addressed by the government, with some clarifications to the approach in respect of standard land transactions (e.g. residential).

3. The ACCC has wide discretion in determining whether an acquisition is not required to be notified under the new notification waiver process.

4. Merits review rights now include a right to seek leave to have new evidence brought before the Australian Competition Tribunal - this can occur either through expert evidence, or where the parties show they didn’t have a reasonable opportunity to respond to that material at the ACCC review stage.

5. The timeframes for the ACCC review process have been made more flexible, especially around conditions and undertakings. The Australian Competition Tribunal timelines also allow for longer extensions. However, the ‘Fast Track’ Tribunal process that had been flagged for matters where merger parties were prepared to accept all of the factual findings of the ACCC, has been removed. This reflects general feedback that it was unlikely to be used.

6. Transitional arrangements will apply such that voluntary filing can commence from 1 July 2025, and there will be grandfathering of mergers that were granted informal clearance by the ACCC before the end of 2025 (provided the mergers are completed within 12 months).

7. A small but interesting note, the ACCC will enjoy their Christmas break. Any statutory timeframes for notification do not include the period from 23 December - 10 January each year.

The government’s focus areas

Treasurer Jim Chalmers highlighted the following areas of focus in his second reading speech for the Bill :

How the ACCC will implement the merger reforms

Coinciding with the release of the Bill, the ACCC also released a statement of goals outlining its intended objectives in delivering the merger reforms and providing guidance on what stakeholders can expect from the new regime. Key goals and takeaways include:

1. Reasons for final determinations for all notified matters will be published. 

2. The Notice of Competition Concerns (excluding any confidential information) provided to merger parties in Phase 2 will also be published. 

3. The ACCC will also provide an explanation of its decision to refer a matter from Phase 1 to Phase 2, including the nature of the theory(s) of harm and the matters it intends to investigate during Phase.

• Reasons for final determinations for all notified matters will be published. 

• The Notice of Competition Concerns (excluding any confidential information) provided to merger parties in Phase 2 will also be published. 

• The ACCC will also provide an explanation of its decision to refer a matter from Phase 1 to Phase 2, including the nature of the theory(s) of harm and the matters it intends to investigate during Phase.

Key dates and next steps

The following table summarises the upcoming key milestones for implementation of the merger reforms, as indicated by the government and the ACCC.

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. 

Mergers that the ACCC decided to not oppose (under the existing informal system) between 1 July and 31 December 2024, and which are completed within 12 months of the ACCC’s decision, will not require notification under the new formal regime.