In with the new: the latest developments on the ACCC's new merger control regime  

Ahead of the Deal - Australian M&A Briefing

The Federal Government has signalled further refinements to Australia's new merger control regime as it responds to feedback and seeks to reduce the regulatory burden for low-risk transactions while maintaining its stated objectives of a faster, more transparent and risk-based system that promotes competition in the interests of consumers.

At the same time, Treasury is consulting on additional voting power thresholds to bring minority acquisitions of private companies and changes of control within scope of the new regime. Treasury is also consulting on the process to apply for a waiver from the requirement to notify. It is proposed that these new rules will, subject to any further changes arising from consultation, come into effect on 1 January 2026.

The scope of these refinements and rules could significantly alter the landscape for certain transactions – and their proposed imminent application means it is now critical for buyers, sellers and targets alike to assess whether an ACCC notification is required for any contemplated deals expected to close in early 2026.

Exemptions and expected refinements to the merger control rules

On 15 October, Assistant Minister Dr Andrew Leigh MP indicated that refinements would be made to the exemptions from the merger control regime set out in the Competition and Consumer (Notification of Acquisitions) Determination 2025.

Importantly, the exemptions limit the scope of transactions caught by the new merger control regime to those considered to be 'typical' mergers and acquisitions given the new regime captures any acquisitions of shares or assets (which is defined as any thing) not in the ordinary course of business that meets the specified monetary thresholds.

The proposed changes include:

• exempting leases and other acquisitions of interests in land (potentially including easements, for example) in the ordinary course of business, unless subject to targeted notification requirements;
• streamlining and simplifying the approach to the monetary thresholds for asset acquisitions and serial acquisitions; and
• clarifying and expanding existing exemptions applicable to financial market activities.

The proposed refinements are welcome and it is expected that the detail will provide businesses with clarity. This could include refining:

• the scope of leases that are exempt (for example by duration), and what 'other interests in land' are included within the exemption. This will be particularly important for many renewables projects impacted by the reforms, and infrastructure or other long lease transactions. Further details are also expected to clarify the scope of the residential property development exemption;
• acquisitions within the scope of the serial acquisitions provisions, to exclude acquisitions otherwise exempt thereby streamlining the application of this economy-wide threshold for businesses;
• technical aspects of the exemptions for money lending, debt and other security interests in response to business and financier concerns that the exemptions were not broad enough to cover typical financing transactions; and
• the approach to calculating the monetary threshold for asset acquisitions including the circumstances in which value should be attributed. It is unclear whether the scope of assets brought into the new regime will also be refined to focus on business acquisitions. Notably the recent Treasury consultation on the draft waiver application form specifically included a category for 'business input acquisitions' if the acquired asset will be used as an input into business activities – a scope notably broader than that applying under the EU and US merger control regimes.

The Government has also indicated that it plans to make practical adjustments to the automatic voiding provisions that still preserve the incentives for parties to notify proposed mergers. This is, however, likely to take place by way of consequential amendments to the primary legislation – and therefore unlikely to occur before the new merger control regime comes into full effect in January 2026.

New voting power thresholds for acquisitions of shares

The proposed new voting power thresholds will mandate notification of acquisitions of shares in private companies (i.e. not Chapter 6 entities or foreign listed entities) which result in voting power of 20% (or more) and 50% (or more).

For Chapter 6 entities (ie listed entities and unlisted entities with more than 50 members), the safe harbour for acquisitions of up to 20% remains available – notably this does not apply for foreign listed entities. The proposed new threshold will mandate notification of acquisitions of shares in Chapter 6 entities and foreign listed entities which result in 50% (or more) voting power.

The additional voting power thresholds are in addition to the requirement to notify the acquisition of shares resulting in "control" (within the meaning of 50AA of the Corporations Act 2001 as modified by section 51ABS of the amended Competition and Consumer Act 2010).

The draft Ministerial Instrument appears to mandate notification if the voting power thresholds of 20% and 50% are crossed irrespective of whether the revenue thresholds are met (or if an exemption applies). However this would be inconsistent with the policy intention that only economically significant acquisitions are within scope (and certain acquisitions exempt). We expect that Treasury will resolve this issue prior to the instrument being finalised.

Waiver from the requirement to notify

Businesses may apply to the ACCC for a waiver from the obligation to notify. Waivers are intended to provide a faster, simpler and significantly cheaper route for 'no competition issues' transactions.

A waiver application will attract a filing fee of $8,300, significantly lower than the $56,800 fee for a Phase 1 merger assessment. The ACCC has indicated that it can approve waiver applications after 10 business days for public comment on the proposed transaction (although this requirement is absent from the draft rules), compared to 15 business days under the Phase 1 fast track process. The ACCC expects to make waiver decisions within 20 business days but under the proposed rules will have up to 25 business days to make a decision.

The draft rules also confirm the availability of a confidential waiver route for 'surprise' hostile takeovers that are unconditional or subject only to no 'prescribed occurrences', and certain voluntary banking and authorised-deposit institution transfers consistent with the existing special arrangements in the merger control framework.

The draft rules do not provide for Australian Competition Tribunal review of ACCC waiver determinations. In practice this means that waived transactions will be able to close immediately, unlike an ACCC clearance determination which is subject to a 14 day waiting period to allow for the prospect of Tribunal review. This could be significant for deals with compressed timelines – and (together with the lower fee amount noted above) means that there may be a real advantage to, in appropriate scenarios, seeking a waiver rather than a Phase 1 approval.

Next steps

With the Government seeking (or expected to seek) feedback on these reforms, businesses should stay informed and actively engage in consultation processes to ensure any changes are fit for purpose and take into consideration relevant business concerns.

In addition, businesses should consider how these proposals could impact their transactions and take steps to ensure compliance and mitigate risks.

More M&A Insights

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• Control issues: insights from the Takeovers Panel's 2024-25 Annual Report 
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