• Mandatory notification

  Notification to the ACCC of transactions above certain thresholds will no longer be voluntary but mandatory, and these transactions will not be able to proceed without ACCC approval. The thresholds will be monetary and market share based.

  Monetary thresholds will be set with reference to typical metrics such as revenue, profitability and transaction value. Any transaction below the monetary threshold that presents a competition risk will still need to be notified to the ACCC if it meets the market share threshold. The Government will set the thresholds following further consultation.

  Additionally, and to prevent ‘creeping acquisitions’, all mergers entered into by the acquirer or the target within the prior three years (whether they were notifiable or not) will be aggregated for the purposes of evaluating whether the merger meets the notification thresholds.

• Single administrative process

  The ACCC will be the first instance administrative decision-maker for all mergers. Merger parties will no longer have a right to seek merger approval by the Federal Court of Australia in the first instance.

  Parties may apply to the Australian Competition Tribunal (Tribunal) for merits review of ACCC determinations, which will be limited to material that was before the ACCC but allow new evidence to be submitted. Judicial review of the Tribunal’s decision may be sought by the parties in the Federal Court (to determine whether the Tribunal's decision was made in accordance with law).

• Substantive test

  Under the proposed reforms, a merger will be prohibited if the ACCC reasonably believes that it would have the effect, or be likely to have the effect, of substantially lessening competition in a market, including if the merger ‘creates, strengthens or entrenches a position of substantial market power’. This significantly expands the current substantive test set out in section 50 of the Competition and Consumer Act 2010 (Cth).

  If the ACCC determines that the transaction shall not proceed for competition reasons following a Phase II review (see below for further detail), the parties to the transaction may seek approval for the merger from the ACCC on the grounds that the merger would result, or be likely to result, in a substantial benefit to the public.

• Suspension of completion

  Completion of any notifiable transaction will be suspended until clearance has been granted by the ACCC, or in the case of a review of an ACCC determination, by the Tribunal.

• Clear timeline

  The proposal outlines indicative timelines for the ACCC review, being:

  • Phase I – initial review of 30 working days where it does not find any competition concerns. A fast track option with a determination made in 15 days is available for non-contentious applications; and
  • Phase II – in depth review of a further 90 working days where the merger is likely to raise competition concerns, with a determination at working day 120.

  If merger parties seek the ACCC’s approval on the grounds of substantial public benefit following a Phase II review (see ‘Substantive test’ section above), the ACCC must make a determination within 50 working days.

  Where an ACCC determination has been appealed, the Tribunal must make its decision within 90 calendar days, but this period may be extended by a further 90 calendar days where necessary.

• Fees

  Notification will incur filing fees in the range of $50,000-$100,000 per application. A fee exemption will be available for small businesses.

• Transparency

  All mergers notified to the ACCC will be listed on a publicly maintained register and will include the names of the merger parties, a short summary of the transaction and the review timeline.

• Penalties

  Merger parties, including executives and officers responsible for the merger, will face substantial penalties for failing to notify the ACCC of a notifiable transaction or for proceeding to the completion of the merger before receiving the ACCC’s determination.

Next steps

The specifics of the new merger clearance system will be determined following Treasury’s further consultation with stakeholders over the course of 2024-2025 regarding appropriate merger notification thresholds, merger review timelines, penalties and any principles to supplement the substantive test (outlined above).

In summary

The announced reforms are substantial and 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 that contentious mergers will in all instances be reviewed by a regulator with clearly expressed views about the current state of the Australian market.