Restructuring transactions captured by new ACCC merger regime
20 November 2025
Introduction
From 1 January 2026, a new mandatory and suspensory merger control regime will take effect in Australia. The new merger regime will not only capture typical M&A transactions but will also potentially capture loan to own transactions, credit bids, pre-packs and convertible notes. Debt trading which involves no more than the purchase of a debt is not caught by the regime. However, if the debt is to be used as the basis or catalyst for a transaction which involves the acquisition of the debtor company or its business, then the regime may apply to that transaction. Private capital, private equity and secured creditors will need to be alive to the new regime's potential impact on distressed transactions and investments.
Public commentary to date has focused on the impacts of the new regime on transactions in settings where the solvency of the target or its business is not in issue. However, the new regime applies equally to distressed scenarios. If you are involved in distressed investing, you will need to understand the new regime and begin planning for it now. The approval periods, the application costs and the voiding provisions will loom large for private investors involved in such distressed scenarios.
Notification of Acquisitions
Generally, acquirers will be required to notify the ACCC of acquisitions of shares or assets where:
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there is a connection to Australia (i.e. the target company is incorporated or carries on business in Australia, or the target asset is used in or forms part of a business carried on in Australia). This does not require any physical presence in Australia; and
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any of the thresholds outlined below are met; and
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the acquisition is not otherwise exempt.
The thresholds are:
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(Very large corporate groups) The acquirer group’s revenue attributable to Australia is ≥$500 million and the target group’s revenue is ≥$10 million (or the cumulative revenue, discussed below, exceeds this amount);
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(Large or larger corporate groups) The acquirer group’s revenue combined with the target group’s revenue attributable to Australia is ≥$200 million and the target group’s revenue ≥$50 million (or the cumulative revenue, discussed below, exceeds this amount); or
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(Transaction value) The acquirer group’s revenue combined with the target group’s revenue attributable to Australia is ≥$200 million and the global transaction value ≥$250 million.
Where the acquisition involves the acquisition of an asset, the Australian revenue attributable to the business operated using the asset is used. If it is not reasonably practicable to attribute the Australian revenue of a target to an acquisition of an asset, the amount to be included is instead 20% of the market value of the asset.
Importantly, the Australian revenue from previous acquisitions by the acquirer over the past 3 years (where target gross Australian revenue was more than $2 million) involving goods or services that are the same, substitutable or otherwise competitive with the current acquisition will be included in the calculation of the cumulative Australian revenue. However, acquisitions that are individually notified are excluded.
This '3 year look back' is particularly relevant to private equity firms which routinely invest or acquire a series of smaller businesses in the same or similar markets, and serves as an added layer when determining if a given acquisition is notifiable (particularly where the transaction is not notifiable on a standalone basis).
The regime is suspensory meaning acquirers are prohibited from putting the transaction into effect until ACCC approval is obtained, and the relevant waiting period (typically 14 calendar days), has expired.
Key Takeaways
The purpose of many restructurings is raising equity for a distressed business or company through new private investment (or further investment from existing lenders). The new regime results in common restructuring techniques, such as "loan to own" and "debt to equity" being potentially captured by the new rules. Under the current merger regime, these types of transactions would not ordinarily be notified to the ACCC.
The new regime focuses on changes in control of the target company. A person is taken to control the target if they (or they, together with their associates jointly) have the capacity to determine the outcome of decisions about the target's financial and operating policies. It is the practical influence that is to be considered. Transactions such as "loan to own" and other debt for equity structures could amount to a change in control. It does not matter if that change occurs via debt as opposed to equity. This is a significant change.
The reforms do not discriminate between acquirers who are in the same industry as the target and those which have no connection with that industry, which may well be the case with many debt traders. It is not yet possible to express a view as to how the ACCC will respond to those different scenarios. However, we assume that acquisitions by a debt trader which has no existing connection with the target's industry will not be affected by the regime.
For secured creditors, this change is significant in terms of timing of realisation of security. In many distressed scenarios, additional funding may need to be provided to ensure the debtor company can continue to trade until the ACCC approves an acquisition.
Exemptions
The regime contains a range of exemptions to notification. This includes, among others:
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an acquisition in the ordinary course of business, unless it is an acquisition of (or acquisition of an interest in) land or patents only. There is a lack of guidance on what is, and what is not, in "the ordinary course of business";
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acquisitions of shares that do not involve the acquirer obtaining control, although certain voting power threshold percentages are deemed notifiable irrespective of whether control exists – for example, acquisitions of shares in private companies which result in voting power of 20% (or more) and 50% (or more);
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acquisitions of shares in the capital of a body corporate which is a listed company, a large unlisted company (>50 members); or a listed registered scheme, and for which the acquisition does not result in holding more than 20% voting power;
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certain acquisitions of a debt instrument, money lending, financial accommodation and security interests;
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internal restructures or reorganisations; and
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acquisitions of various financial securities including rights issues and derivatives;.
The exemptions (particularly those relating to debt instruments, money lending, financial accommodation and security interests) are highly technical and fact specific and we recommend that acquirers take expert advice before seeking to rely on them. A failure to notify a notifiable acquisition to the ACCC will result in the transaction being void and would expose the parties (both individuals and corporates) to significant penalties.
Waiver
Additionally, from 1 January 2026, an acquirer can apply to the ACCC for a waiver from the notification regime in respect of any given acquisition. Importantly, transactions for which waivers are sought will be published on the ACCC's Acquisitions Register for a minimum of 10 business days before the ACCC makes a determination. The exposure draft does not provide for Australian Competition Tribunal review of the ACCC's waiver decisions – in practice this means that waived transactions will be able to close immediately, unlike an ACCC clearance decision which is subject to a 14 calendar day waiting period to allow for the prospect of Tribunal review.
Filing fees
Notifications and waiver applications will be subject to filing fees, which are not insignificant particularly for transactions that may require an in-depth review. The current filing fees are:
- Application for waiver: $8,300
- Notification (phase 1): $56,800
- Notification (phase 2):
- $475,000 (for transactions valued at $50 million or less)
- $855,000 (for transactions valued at more than $50 million but not more than $1 billion)
- $1,595,000 (for transactions valued at more than $1 billion)
Key Considerations
Timing
Regardless of whether the transaction gives rise to any plausible competition issues, the ACCC is statutorily prohibited from providing a determination on a notification before 15 business days have elapsed. Additionally, once a determination has been made, there is, typically, a 14 calendar day standstill period to allow for review of the ACCC’s decision.
In addition the ACCC will only commence the formal review process (i.e. start the 15 business day clock) once the parties have signed a contract or formed an intention to enter into a contract (which might be evidenced by, eg, a Heads of Agreement). For example, in a competitive bid process, bidders will not be able to be 'pre-granted' approval by the ACCC before being selected by the vendor, which departs from current practices. However, legislative reforms are expected in 2026 to permit ACCC consideration of competitive bids.
The minimum timing has significant implications for secured creditors in terms of keeping insolvent or heavily distressed businesses alive while awaiting ACCC approval of a sale. Secured creditors may need to consider whether providing additional funding is necessary or desirable in order to keep a distressed business alive until a sale can be effected, noting that the runway to completion of a sale that involves no plausible competition issues could now be significantly extended due to the requirements of the new regime.
The timeframes do not sit well with the urgency of a distressed situation.
Types of transactions likely to be caught
The following classes of transaction, which are prevalent in restructuring and which have not historically been notified to the ACCC or necessarily considered through a competition lens, are potentially subject to the notification regime:
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"loan to own" structures where the right/option to convert the debt to equity gives "control" of the target to the acquirer;
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enforcing security and then credit bidding for all or substantially all the target's assets; and
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"debt for equity" swaps which result in the creditor obtaining control of the target or 20% (or more) or 50% (or more) voting power in the target entity.
In respect of these transactions, or any other structure which results in the acquirer obtaining control (or obtaining an exercisable option which would facilitate them obtaining control), the parties need to be conscious of the potential risk the acquisition is notifiable. This extends to the taking, acquiring or perfection of a security interest in certain circumstances where an exemption is not available. We are actively considering these techniques and how to navigate the new regime.
Gun Jumping
The merger reforms prohibit parties from putting into effect an acquisition that has been notified or is required to be notified before the ACCC has made its determination (also known as "gun-jumping"). Putting into effect an acquisition does not necessarily require the full transfer of legal ownership. For example, a private investor exercising decision-making powers in respect of the target or being given control of the day-to-day operation of its business prior to completion is likely to constitute putting into effect the acquisition.
Particular caution is needed in respect of the acquisition of distressed businesses, including that decision making powers are not exercised (or funding is not provided) prior to ACCC approval. In addition, due to the broad nature of the gun-jumping provisions, an agreement which outlines how a business is to trade prior to completion may be captured by this prohibition. Private investors need to be aware that they will be limited in how much influence they can exert over the operations of a target prior to ACCC approval and expiry of the standstill period.
Gun jumping rules will impact pre-packs and licencing arrangements when implementing a restructuring. The implementation documentation will need to be carefully considered if part of a restructuring package.
Provisions in Notifiable Agreements
We expect that notifiable transactions will now need to routinely include conditions precedent for ACCC approval. In addition, other timing related concepts (including long-stop dates) will need to be considered in light of requirements to notify the ACCC.
The implications for the restructuring landscape will be profound. To date commentary has focused on the stock standard mergers and acquisitions but a new frontier will open for the distressed sector. The timeframes, fees, notification requirements and the consequences of failing to comply (voiding the transaction) all provide significant challenges and barriers to what are already difficult situations.
Stay tuned
The Government has foreshadowed potential changes to the regime, including potential refinements to the exemptions, that may be relevant to transactions in the restructuring space. We are awaiting further details.
In the meantime, we are working closely with our Competition team on how best to navigate the new regime. Reach out if you would like to discuss the new regime or if you have particular deals in mind.
Authors: Richard Fisher, Consultant; Michael Sloan, Partner; Alinta Kemeny, Partner; Sarah Worrall, Counsel; Emanuel Poulos, Partner; Tihana Zuk, Partner; John McKellar, Counsel; Annalisa Heger, Counsel; Tom Carr, Lawyer; and Peter Tryfonopoulos; Lawyer.
