Background

The new merger notification regime, which will become mandatory on 1 January 2026, is taking shape.

The Federal Treasurer has released, for public consultation, an exposure draft of the legislative instrument setting out the monetary thresholds and forms for the notification of acquisitions to the ACCC (Draft Instrument).

The ACCC has released draft guidelines in relation to the notification arrangements in the transitional period, the merger process including the use of the notification forms, and the substantive assessment of mergers.

As the Australian Government has now entered into ‘caretaker’ mode, no further developments are expected until after the Federal election which will take place on 3 May 2025.

In this update, we summarise the ‘state of play’ of the new mandatory notification regime.

Transitional arrangements

The new regime can already be used on a voluntary basis from 1 July 2025 onwards. The ACCC’s guidance on the transitional arrangements seeks to assist parties considering an acquisition which may require notification in the transitional period. The following principles apply:

i. Acquisitions that receive informal clearance from the ACCC under the current voluntary regime between 1 July and 31 December 2025 will not be subject to the new mandatory regime provided they are completed within 12 months of receiving the ACCC’s clearance letter.

ii. For acquisitions that receive, or have received, informal clearance from the ACCC under the current voluntary regime before 1 July 2025 but will not be completed by 31 December 2025, the parties should request an “updated” informal review as soon as possible after 1 July 2025.

iii. Any other acquisition which will be put into effect after 1 January 2026 will be subject to the new mandatory regime and will need to be notified to, and require approval of, the ACCC if the notification thresholds are met (and no exemption applies).

Importantly, if parties notify their acquisition to the ACCC under the current regime in 2025, but the ACCC does not grant informal clearance by 31 December 2025, the acquisition will need to be re-notified under the new mandatory regime in 2026.

The ACCC has “warned” parties that informal clearance applications received after early October 2025 will be at risk of not being considered in time for the 31/12/25 deadline. To minimise the risk of this occurring, parties should seek informal clearance from the ACCC for their acquisition well before early October or, if this is not achievable, notify their acquisition under the new mandatory regime instead.

Notification thresholds

The Draft Instrument contains three monetary notification thresholds. An acquisition will be notifiable if one of the following thresholds is met:

1. Combined acquirer/target threshold

a. The combined Australian turnover of the acquirer group and the target group is $200 million or more; and

b. either

i. the Australian turnover of the target group is $50 million or more; or

ii. the global transaction value is $250 million or more.

2. Large acquirer threshold

a. The acquirer group’s Australian turnover is $500 million or more; and

b. the Australian turnover of the target group is $10 million or more.

3. Serial acquisitions thresholds

a. The combined Australian turnover of the acquirer group and the target group is $200 million or more; and

b. the cumulative Australian turnover from acquisitions by the acquirer group involving the supply or acquisition of the same, substitutable or competitive goods or services over a 3-year period is $50 million or more.

or

c. The acquirer group’s Australian turnover is $500 million or more; and

d. the cumulative Australian turnover from acquisitions by the acquirer group involving the supply or acquisition of the same, substitutable or competitive goods or services over a 3-year period is $10 million or more.

Exclusion: Acquisitions of a target with less than $2 million Australian turnover will be excluded from the application of the serial acquisitions thresholds.

As an additional requirement, the target will need to have a “material connection” to Australia. This is a fairly low threshold and will be satisfied if the target is carrying on a business in Australia (or has plans to do so).

Supermarkets

The Draft Instrument requires Coles and Woolworths (but not Aldi) to notify all proposed acquisitions of a “supermarket business” (including vacant land to be used for a supermarket business) irrespective of whether or not the notification thresholds are met.

Notification waivers

The process for applying for a notification waiver from the ACCC is yet to be determined by the Treasurer; it has not been included in the current Draft Instrument. However, the ACCC has provided some guidance about notification waiver applications in its draft Merger Process Guidelines:

i. Notification waiver applications can be made from 1 January 2026.

ii. An application for a notification waiver will be made public on the ACCC’s Acquisition Register.

iii. The ACCC expects that it will make a notification waiver determination in the vast majority of cases within 20 business days.

iv. In determining a notification waiver application, the ACCC will consider the likelihood that an acquisition is notifiable and/or would have the effect or likely effect of substantially lessening competition.

In other words, the ACCC will only consider granting a notification waiver if an acquisition is either unlikely to be notifiable or raise any competition concerns (because, for example, there are no competitive overlaps between the parties’ operations in Australia).

Pre-lodgement engagement

The ACCC encourages parties to engage with it prior to lodging a notification (pre-lodgement engagement) to identify and discuss areas of focus and the information and market data which will be most relevant for the ACCC’s assessment. This will assist the ACCC is assessing a notification efficiently and reduce the risk of the ACCC declaring a notification incomplete and/or suspending the review timeline by requesting additional information from the parties or issuing a section 155 Notice compelling the parties to furnish information or produce documents.

The pre-lodgement engagement will generally be a confidential process, and parties are expected to initiate the engagement at least 2 weeks prior to the expected notification date. However, the ACCC encourages parties to engage with it “much earlier” where the acquisition:

i. involves concentrated markets;

ii. is part of a global transaction subject to merger reviews by regulators in overseas jurisdictions; or

iii. where competition concerns may need to be addressed through a commitment or undertaking (such as a divestiture).

How long a pre-lodgement engagement may take will depend on the complexity of the case. In simple cases, it may be sufficient for the parties to provide basic information about their proposal and inform the ACCC about the expected time for lodgement. In more complex cases, however, it may be “more useful” to start the engagement after a draft notification form has been provided to the ACCC.

Review process

The statutory review periods will start once a complete notification has been received by the ACCC. The review process consists of the following steps:

i. Phase 1 competition review: The statutory period for the initial review is 30 business days, but the ACCC expects to grant a “fast-tracked” approval for around 80% of all notified acquisitions within 20 business days.

ii. Phase 2 competition review: If the ACCC determines that it will need to conduct an in-depth review, the statutory period for the “phase 2” review will be 90 business days. The ACCC will then either determine that the acquisition can be put into effect (with or without conditions) or must not be put into effect.

iii. Substantial public benefit application: If the parties make a substantial public benefit application within 21 days of the ACCC’s determination to oppose an acquisition, the statutory period for the public benefit assessment will be 50 business days. The ACCC will then again, either determine that the acquisition can be put into effect (with or without conditions) or must not be put into effect.

The above statutory timeframes will be extended by 15 business days if a merger remedy is offered to allay or remove competition concerns.

Notification forms

The Draft Instrument sets out two notification forms: a “short” form for acquisitions that are unlikely to raise competition concerns and a “long” form for acquisitions that may, or are likely to, raise competition concerns.

The difference between the notification forms is substantial. In particular, the long form requests parties to produce potentially large volumes of documents including board papers and presentations and market studies relevant to the acquisition which were prepared in the 3-year period prior to the transaction, among other documents.

The ACCC has released provisional guidance on the use of the long notification form. According to the ACCC’s guidance, the long form should be used for acquisitions where:

1. Horizontal acquisitions

a. the parties supply or potentially supply products or services in the same market; and

b. the parties’ estimated combined post-acquisition market share is:

i. at least 40% and the increment resulting from the acquisition is at least 2%; or

ii. at least 20% but less than 40% and the increment resulting from the acquisition is at least 5%.

2. Vertical acquisitions

a. a party supplies products or services in a market that is up- or downstream from a market in which another party supplies products or services; and

b. the party in the upstream (or downstream) market has an estimated market share of at least 30% and the other party has a downstream (or upstream) market share of at least 5%.

3. Conglomerate acquisitions

a. the parties supply “adjacent” products or services (= products or services that are not in the same market or in the same supply chain, but are related in some way because, for example, they target similar customers or may be purchased or supplied together); and

b. one of the parties has an estimated market share of at least 30%.

4. Other acquisitions

According to the ACCC’s provisional guidance, it may be “appropriate” to use the long notification form for acquisitions that involve:

a. a "vigorous and effective" competitor;

b. firms that develop a significant product in a market where both parties supply or potentially supply products;

c. firms that control access to a significant input or asset (e.g. raw materials, infrastructure, IP) or competitively significant data; or

d. firms with a significant user base.

Notification fees

The Treasurer is yet to determine the filing fees for a notification of an acquisition and for an application for a notification waiver. It has been suggested that a notification of an acquisition will attract a filing fee in the order of between $50,000 - $100,000.

Exemptions

Certain types of acquisitions are exempt from the notification requirement, including:

i. Acquisitions of shares in an unlisted entity if there is no “change of control” (i.e. if the acquirer already controls the target before the acquisition, or will not control the target after the acquisition).

ii. Acquisitions of shares in a listed corporation etc. (= “Chapter 6” entities) if the acquirer will hold no more than 20% of the voting rights after the acquisition.

iii. Acquisitions of land made (i) for the purpose of developing residential premises or (ii) by a business primarily engaged in buying, selling or leasing land for any purpose other than operating a commercial business on the land.

iv. Acquisitions by an administrator, receiver, receiver and manager, or liquidator.

v. Acquisitions that take place solely because of a testamentary disposition, intestacy or a right of survivorship under a joint tenancy.

vi. Financial activities related to capital fundraising including rights issues; dividend reinvestment; underwriting of fundraising and buy-backs.

vii. Acquisitions of security interests over shares or asserts.

viii. Acquisitions of an interest in securities by a person acting as bare trustee.

ix. Acquisitions of exchange-traded derivatives that confer an equitable interest in a share or asset.

Conclusion

The new notification regime means that many more acquisitions will need to be notified to the ACCC, and it will provide the ACCC with increased merger clearance powers. Dealmakers who might have otherwise taken a bullish position on entering transactions in Australia must now be conscious of the parameters that the new approval process presents and respect the waiting periods imposed by the mandatory nature of the regime.

Acquirers conducting due diligence on the target’s business or engaging in pre-closing integration planning need to be extra careful not to take any steps which might contravene the “gun jumping” prohibition of the new regime.