Merger clearance reform confirmed

On 28 November 2024, Federal Parliament passed new amendments to the Competition and Consumer Act 2010 (Cth), providing significant reform to Australia’s merger laws.

From 1 January 2026, mergers and acquisitions that meet new, but not yet prescribed, monetary thresholds will be subject to mandatory review by the Australian Competition & Consumer Commission (ACCC).

Key features of the merger clearance reform

The new merger clearance laws will apply to mergers which meet certain monetary thresholds. Whilst not yet confirmed, the Federal Government has indicated that they intend to implement the three following thresholds for notifiable transactions:

Economy-wide monetary threshold

Where:

• the merging parties have a combined Australian annual turnover of at least $200M; and
• two or more of the merging parties have an Australian annual turnover of at least $50M, or the global transaction value is at least $250M.

OR

‘Very large acquirer’ threshold

Where:

• the acquirer group’s Australian turnover is at least $500M; and
• two or more of the merger parties have an Australian turnover of at least $10M.

OR

Three-year cumulative turnover threshold

For:

• Medium to large size mergers where:
  • the merger parties have a combined Australian turnover of at least $200M; and
  • the cumulative Australian turnover from acquisitions in the same or substitutable goods or services is at least $50M over a three-year period.
• Very large acquirers where:
  • the acquirer group’s Australian turnover is at least $500M; and
  • the cumulative Australian turnover from acquisitions in the same or substitutable goods or services is at least $10M over a three-year period.

Transactions that meet any of these thresholds will be suspended and subject to mandatory ACCC clearance review. ACCC clearance review is conducted in a 2-phase process, with an initial high-level review as Phase 1 and a subsequent in-depth review as Phase 2. If no issues are identified in Phase 1, the transaction may receive a fast-track determination.

The ACCC will grant clearance to transactions that it deems will not ‘substantially lessen competition’. To ‘substantially lessen competition’, a transaction would have the effect or likely have the effect of creating, strengthening or entrenching a substantial degree of power in the relevant market.

Following clearance review, determinations will be published on the ACCC’s Acquisitions Register along with a statement of reasons, transaction details and information on products or services that may be affected.

Public benefit review

If a transaction is rejected, the parties may make a public benefit application to the ACCC within 21 days. The ACCC may provide clearance to an initially rejected transaction if they are satisfied that the transaction would provide a public benefit which outweighs any detriment from a lessening of competition in the relevant market.

Transitional arrangements

There are limited transitional arrangements for merger clearance prior to the commencement of the new laws on 1 January 2026. Parties may voluntarily apply for clearance under the new merger laws from 1 July 2025. This may be an advantageous option for parties, as exemptions will not be given to transactions cleared under the outgoing merger laws which are not completed before 1 January 2026.