Australian Merger Clearance Reforms | Impacts for M&A

What's happening?

• Existing informal process and merger authorisation regime to be replaced by a new mandatory and suspensory merger clearance regime
• Proposed by the Government to commence January 2026 but deals in 2025 will be impacted
• Reforms will require parties to give strategic consideration to the timing of upcoming deals and the transition arrangements
• Reforms likely to result in more deals requiring Australian Competition and Consumer Commission (ACCC) clearance and the ACCC having a broader scope to oppose deals

What more do we know now?

The Government has introduced into Parliament the Bill for the new merger control regime. It sets out the legal framework for the new regime, including what types of transactions cannot proceed without ACCC clearance, the timeframes for the ACCC’s review and the appeal rights from any ACCC decision. The Senate has referred the provisions of the Bill to the Senate Economics Legislation Committee for inquiry and report by 13 November 2024.

The proposed notification thresholds have also been released. Consultation in relation to the thresholds and key details that will determine how they apply is ongoing.

What’s going to be the impact on M&A?

1. More deals subject to ACCC clearance: The notification thresholds are likely to capture deals that would not typically be notified to the ACCC under the existing regimes, including acquisitions by large corporations or funds that have no competitive effects or overlaps, and some land and patent acquisitions. 
2. More timing certainty for some deals: Statutory timeframes will provide greater timing certainty for transactions that do not raise any competition issues (e.g. a 15 business-day fast track approval process) but more complicated reviews are still likely to take many months (e.g. a 90 business-day timeframe but with scope for significant delays).
3. Broader powers for ACCC to block deals but quicker appeal route: The ACCC will be given a broader scope to block deals (due to changes to the legal threshold) and the appeal rights for a decision by the ACCC to block a merger will be more limited than what is currently available for ACCC decisions in the informal merger clearance process.  However, appeals of ACCC decisions may become more common, as the appeal process will be substantially quicker and cheaper.
4. The transition arrangements will impact deals in 2025: Parties should carefully consider transaction timelines to avoid delay or risk during the transaction period (e.g., having to restart a review under the new regime). 

Does my deal need ACCC Clearance?

1. Is it an acquisition of either:

• a controlling interest of shares, unit trusts, or managed investment scheme; or
• the assets of a person or corporation?

Control

• Aligned to s50AA definition in Corps Act (capacity to determine the financial standing and operating policies of a body corporate)
• ‘Bright line’ test requiring notification of all acquisitions of more than 20% shares in private/unlisted companies where one merger party has more than $200 million turnover
• Safe harbour for acquisitions of <20% voting power in listed companies/schemes or unlisted companies with >50 members

2. Does it fall within one of the notification thresholds? 

What happens next?