Compulsory Merger Control Regime
Starting on 1 January 2026, a compulsory merger control regime applies in Australia. This means that businesses that are proposing to acquire shares or assets that meet prescribed thresholds are required to notify the ACCC before completing a deal, and the transaction must not go ahead if approval is not granted. This page outlines the new compulsory merger control regime and the reasons it has been introduced.
Legislation
The Treasury Laws Amendment (Mergers and Acquisitions Reform) Act 2024 introduces the compulsory merger control regime, which is administered through the Competition and Consumer Act 2010.
Role of the ACCC
Under the new regime, the ACCC has a central role in assessing proposed mergers. Businesses whose acquisitions meet the prescribed thresholds must submit a notification to the ACCC and cannot proceed with the transaction until the commission has either approved it or granted a waiver.
This process ensures that potentially anti-competitive mergers are reviewed before they take effect, rather than relying on the ACCC to intervene after a deal has already been completed, which often proved too late to mitigate market impacts.
How are the thresholds determined?
The thresholds for mandatory notification are determined based on factors such as turnover, transaction value, and increases in voting power, including cumulative holdings through multiple smaller transactions known as creeping acquisitions.
These thresholds are detailed in subordinate legislation, including the Competition and Consumer (Notification of Acquisitions) Determination 2025.
The thresholds apply not only to traditional mergers of companies but also to acquisitions of assets, partial interests in companies, managed investment schemes, and even certain interests in trusts. This broader scope means that a wider range of business transactions will now fall under ACCC scrutiny than in the past.
No clearance, no deal
One of the most notable aspects of the new rules is the “no clearance, no deal” principle. Once a transaction meets the notification criteria, businesses are legally prohibited from completing the acquisition until the ACCC has granted approval.
If a company proceeds without notification or approval, the transaction could be declared void, and the parties involved may face enforcement action or civil penalties. This introduces a degree of certainty for both the regulator and market participants, ensuring that potentially harmful mergers are carefully evaluated before taking effect.
The ACCC is required to make decisions within statutory timeframes, allowing businesses to anticipate how long the review process will take. Simple, low-risk transactions may be resolved relatively quickly, whereas more complex deals will undergo detailed assessment. The ACCC also maintains a public register of notified mergers, providing transparency and allowing other market participants to monitor significant transactions that may affect competition.
Purpose of the changes
The reforms are aimed at strengthening competition oversight, increasing transparency in the market, and aligning Australia’s merger control regime with international best practices, such as those in the European Union, the United States, and Canada. By requiring businesses to obtain approval before completing certain acquisitions, the reforms aim to prevent transactions that could substantially lessen competition or create public detriment.
The introduction of mandatory notification has been driven by concerns that the previous voluntary system did not provide sufficient protection for consumers and competition. Under the old framework, many acquisitions were never formally reviewed, and the ACCC could only intervene after the fact, often when anti-competitive impacts had already occurred. By requiring pre-emptive notification and approval, the reforms seek to ensure that mergers which could harm competition are addressed proactively.
Beyond competition concerns, the reforms also provide clarity and predictability for businesses. Companies now have a defined process for determining whether an acquisition is notifiable, submitting notifications, and receiving clearance from the ACCC. This transparency helps businesses plan transactions more effectively, as they can factor potential review timelines into their deal structuring and negotiations. Additionally, statutory timeframes and clear guidance from the ACCC reduce uncertainty and the risk of inadvertent non-compliance.
The broader coverage of the new regime also reflects an understanding of modern business practices. For instance, creeping acquisitions, where a company gradually increases its shareholding in a competitor through multiple smaller transactions, are now included. This ensures that companies cannot bypass regulatory oversight by acquiring stakes incrementally, which in the past could avoid triggering a review. Similarly, asset acquisitions, partial interests, and acquisitions within managed investment schemes are now captured, reflecting the complexity and variety of contemporary business arrangements.
The reforms are expected to have significant benefits for competition in Australia. By preventing anti-competitive mergers before they occur, the ACCC can safeguard consumer choice, maintain market dynamism, and promote fair pricing. The visibility provided by the public register and the requirement for prior approval also contribute to a more transparent marketplace, enabling stakeholders to make informed decisions and anticipate potential impacts from significant transactions.
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Fernanda Dahlstrom is a writer, editor and lawyer. She holds a Bachelor of Laws (Latrobe University), a Graduate Diploma in Legal Practice (College of Law), a Bachelor of Arts (The University of Melbourne) and a Master of Arts (Deakin University). Fernanda practised law for eight years, working in criminal law, child protection and domestic violence law in the Northern Territory, and in family law in Queensland.