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 enforecement 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: Acquisitions 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. Notification thresholds: the Minister will determine thresholds by legislative instrument (e.g. regulations). Treasurer Jim Chalmers has already indicated the government intends to set monetary thresholds (and not market share or concentration-based thresholds as previously anticipated) as follows:
   1. Australian turnover of the combined businesses is above A$200 million, and either the business or assets being acquired has Australian turnover of more than A$50 million or global transaction value above A$250 million.
   2. A very large business with Australian turnover of more than A$500 million buying a smaller business or assets with Australian turnover above A$10 million.
   3. To target serial acquisitions, all mergers by businesses with combined Australian turnover of more than $200 million, where the cumulative Australian turnover from acquisitions in the same or substitutable goods or services over a three-year period is at least $50 million, will be captured; or $10 million if a very large business is involved.
2. Review of serial acquisitions: In determining “whether an acquisition, if put into effect, would or could, in all the circumstances, have the effect, or be likely to have the effect, of substantially lessening competition in any market”, the ACCC may treat the effect of an acquisition as being the combined effect of the current acquisition and any one or more acquisitions:
   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.
3. Exclusions from mandatory notification: An acquisition of shares in the capital of a body corporate is not required to be notified if: (a) the body corporate is a “Chapter 6 entity” (i.e. a listed entity, or an unlisted company with more than 50 members, or a listed registered scheme, within the meaning of the Corporations Act 2001 (Cth) (CA)) and (b) the acquisition does not result in someone’s voting power (within the meaning of the CA) in the body corporate increasing: from 20% or below to more than 20%; or from a starting point that is above 20% and below 100%. This alignment of the control test with longstanding corporations law provides considerably improved clarity and certainty for the test.
4. Introduction of a new notification waiver power for the ACCC: Following calls from business and other stakeholders, the Bill introduces a wide waiver process that allows merger parties to request that the ACCC waive the obligation to notify an acquisition. In deciding whether to grant a waiver, the ACCC must have regard to the following:
   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.  
   4. The likelihood that the acquisition would, if put into effect, have the effect of substantially lessening competition (SLC).
5. Timeframes: The total timeframes in the Bill largely appear to be the same as in the exposure draft (including that the duration of the Phase 1 and Phase 2 review periods will be up to 30 and 90 business days, respectively, subject to any extensions), with the following amendments:
   1. The final date for parties to respond to the Notice of Competition Concerns has been extended by 10 business days. Upon receiving the Notice of Competition Concerns, the notifying party has 25 business days to make a submission.
   2. 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 60^th business day after the start of the Phase 2 review period, or if an extension has been granted. 

   3. 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.

6. Introduction of a confidential review process for surprise hostile takeovers and certain acquisitions involving voluntary transfers under the Financial Sector (Transfer and Restructure) Act 1999: Following concerns raised in response to the exposure legislation, the Bill introduces a separate and confidential review processes for surprise hostile takeovers and certain acquisitions involving voluntary transfers to enable the ACCC to assess them without disclosing the notification on the acquisitions register for a specified period. Under the earlier public takeovers of this kind would have raised risks given the minimum decision period of 15 business days.
7. The expanded competition test to be applied for considering competition impacts and substantial public benefits: 
   1. The new legislation retains a reference to the substantial lessening of competition test as being one that may include lessening that results from “creating strengthening or entrenching substantial market power”. However, the approach has been modified in two important respects. First, this new and expanded test only applies to the merger provisions and not across all of the competition provisions (as had been previously proposed). Second, the drafting subtly, but importantly, indicates that an SLC may arise from an entrenchment of market power. It does not automatically deem this to have occurred. The Explanatory Memorandum further emphasises that the amended test is not intended to substantively amend or change the approach to SLC, but merely to provide an additional emphasis on what mergers may do to the structure of markets. 
   2. The government has also reverted back to an orthodox ‘net public benefits’ test (i.e. whether the acquisition will result or be likely to result in a benefit to the public that outweighs the detriment to the public). This reflects criticism received from stakeholders concerning the previous and new proposal to introduce a ‘substantial public benefits’ test (i.e. whether the benefit would substantially outweigh any detriment). 
8. Review by the Australian Competition Tribunal (Tribunal): In a welcome development, the Bill responds to longstanding criticism of the current Tribunal process for merger authorisations by introducing a discretion that allows the Tribunal to permit parties to provide new information if relevant to the ACCC determination and if they weren’t given a reasonable opportunity to make submissions during the ACCC’s review. There is also scope for new evidence to be introduced before the Tribunal as part of it receiving evidence from experts during any review process.
9. Transitional arrangements have been improved. An area of serious concern with the exposure draft legislation was the inadequacy of transitional provisions. This has been addressed, to some extent, in the Bill by providing for voluntary notification under the regime to commence from 1 July 2025 (it had previously been 1 December 2025). There is also now a 12-month grandfathering of protection for any deals that receive informal clearance before 31 December 2025. 

10. 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 previously proposed expansion of the SLC test (to clarify that SLC can result from creating, strengthening or entrenching substantial market power) now only applies to the merger process – not to the other competition prohibitions in Part IV of the CCA as previously proposed; the language of ‘entrenchment’ is also framed alongside the word ‘may’ such that it is intended to “elucidate” but not change the current SLC standard. The Explanatory Materials note that the inclusion of the ‘entrenchment’ language in the Bill is “…intended to clarify that creating, strengthening or entrenching market power can amount to a substantial lessening of competition” (emphasis added) and that “…it is not intended to alter or limit the scope of the general meaning of ‘substantial lessening of competition’ in the CCA.  
6. 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.
7. 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).
8. 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:

1. Mergers that can “cause serious economic harm”: The government considers serious economic harm can occur when businesses are “not interested in improving profitability by lifting productivity” and “solely focused on squeezing out competitors to capture a larger percentage of the market”. The legislation seeks to improve the current merger regime by making the system faster, stronger, simpler, more targeted and more transparent. 
2. Mergers in the supermarkets sector: Treasurer Chalmers said “the legislation provides flexibility to allow the Treasurer to adjust and calibrate the thresholds to respond to evidence‑based concerns from the ACCC about high‑risk mergers, like in the supermarket sector… Using this provision, the government intends to make sure the ACCC is notified of every merger in the supermarket sector… Reviewing every supermarket merger is all part of the decisive action our government is taking to help Australians get fairer prices at the checkout. We want to make sure supermarket mergers don’t come at the cost of Australians, families and pensioners getting a fair price on their grocery bills. Our merger reforms will help ensure our supermarkets are as competitive as they can be so Australians get the best prices possible.” 
3. Focus on acquisitions by private equity and large companies of an interest above 20% in an unlisted or private company: Treasurer Chalmers said “On the advice of the ACCC Chair, the government also intends to use this power to get the competition regulator to review purchases of an interest above 20 per cent in an unlisted or private company, if one of the companies involved in the deal has turnover more than $200 million. This is all about lifting the level of scrutiny and transparency for private markets transactions, which have boomed in Australia in the past decade. It will give the ACCC the ability to analyse changes of control in private companies to ensure negative competition effects are avoided and to scrutinise these deals in more detail.” 
4. Other potential sectors of interest: He also flagged the government will also consider designation requirements for sectors such as fuel, liquor and oncology‑radiology.

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. Faster timeframes: The ACCC has reiterated its expectation that it will make a determination in 15 to 20 business days for around 80% of mergers, either through an early Phase 1 determination or the new notification waiver process (which the ACCC supports). The ACCC notes that full disclosure by the parties and open dialogue with the ACCC should limit the need for extensions to the Phase 1 and 2 and public benefits review timeframes. 
2. Greater transparency: All notified acquisitions will be published on an ACCC public register, except for a small range of acquisitions which will not be made public for a temporary period (such as surprise hostile takeovers). Importantly: 
   • 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.
3. Clear notification requirements for parties: The ACCC will encourage pre-lodgement engagement with merger parties to facilitate, where needed, discussions regarding their notification, timing considerations and information requirements, and the expeditious review of notifications. The ACCC has indicated that pre-lodgement discussions may also assist parties manage uncertainty around notification thresholds, including whether serial acquisitions need to be aggregated for notification purposes. 
4. Risk-based approach underpinned by enhanced data and economic analysis: The ACCC has indicated its intention to enhance and increase its use of economic and data analysis throughout the merger review process. It therefore seems reasonable for stakeholders to expect a more economically rigorous ACCC in its merger assessments.
5. Economy-wide competition research and ACCC accountability: The ACCC proposes to establish a new internal workstream focussed on economy-wide competition analysis and reviews of past ACCC decisions in the new regime. This is in order to assess and report on issues including the effectiveness of the new merger regime and whether the notification thresholds are adequately capturing mergers of potential competitive concerns.
6. New analytical and process guidelines: The ACCC will publish new analytical and process guidelines that it intends to open to public consultation in “early 2025”. These guidelines are intended to provide clarity on when and how to engage with the ACCC in the new regime, including in relation to notification waivers and pre-lodgement discussions. 
7. Clear path to transition: The ACCC has agreed to bring forward implementation so that merger parties will have the ability to notify the ACCC on a voluntary basis from 1 July 2025 before mandatory notification commences on 1 January 2026. Merger parties can continue to apply for merger authorisation until 30 June 2025, and may continue using the informal regime until 31 December 2025. Where informal clearance has been granted between 1 July 2025 and 31 December 2025 and the acquisition is put into effect within 12 months of receiving clearance, merger parties will not be required to notify under the new regime. The ACCC will publish clear guidelines on the transition period to ensure stakeholders are well informed and are aware of where to direct inquiries.
8. Improved internal capacity and streamlined processes: The ACCC notes it will require a significant increase in its tools and capacity to make the new system operate effectively. Further resources will also be committed to monitoring and surveillance for non-compliance with notification requirements to minimise anti-competitive acquisitions proceeding.
9. Next steps: The ACCC is committed to ensuring that the new merger control regime delivers on these objectives over time and provides benefits to both businesses and the wider community in the form of a more efficient, predictable process that gives the public confidence that transactions that may adversely affect competition are adequately scrutinised. A priority for the ACCC will be its surveillance and monitoring functions to ensure that the mandatory notification obligations are complied with.

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.