Key Takeaways

Australia’s updated mergers and acquisitions framework, effective 1 January 2026, introduces a mandatory notification regime for mergers and acquisitions that is much more complex than the current voluntary system. The new process presents both strategic and operational challenges for businesses and applies to a broad range of transactions;

• The new regime requires mandatory notification to the ACCC if thresholds are met which is different to the existing voluntary regime
• The notification thresholds are generally based on the revenues of the parties to the transaction, not the value of the transaction or whether the transaction will result in a substantial lessening of competition
• Many transactions that historically have not been the subject of competition regulatory oversight will now be notifiable, including new leases, construction contracts, distribution agreements, service agreements, grants of licences, and IP agreements
• Any transaction that was not notified to the ACCC but should have been will be void
• There is uncertainty about how the notification thresholds and exemptions will work in practice.

Background

Under the new regime, acquisitions of shares or assets must be notified to the ACCC if the transaction is connected to Australia, results in a change of control, the relevant parties to the transaction (not the value of the transaction) meet certain thresholds, and no exemptions apply.

In other words, notification is generally based on the revenue of parties to a transaction, and not the value of the transactionor whether the transaction will result in a substantial lessening of competition.

The thresholds are as follows:

Issues

Assets and transactions

Historically only ‘mergers and acquisitions’ type transactions such as shares and land were the subject of competition regulatory oversight. The new regime is different, applying a wide definition to ‘assets’. Transactions involving these assets will now need to be notified if the thresholds are met.

Under the new regime ‘assets’ includes any kind of property as well as a legal or equitable right that is not property. It could include, for example:

• New leases
• Rights conferred pursuant to construction contracts
• Development contracts
• Rights to manage an asset
• Distribution agreements
• Service/ outsourcing agreements
• Grants of licences (including liquor licences)
• Intellectual property agreements
• Transfers of existing contractual rights.

This presents a substantial challenge, as many parties will be unaware that these transactions are now regulated and are notifiable to the ACCC.

Exacerbating the issue is that the consequences for non-notification are significant. Any transaction that was not notified but that should have been notified will be void (and not voidable). This will cause significant complications for the parties to a transaction, as they would then need to either unwind the transaction and/ or seek Federal Court intervention.

An extra layer of complication will exist regarding transactions that have long since settled or that involve and have implications for third parties, for example, employees or contractors and their entitlements.

Uncertainty and challenges

There is uncertainty about how the notification thresholds and exemptions will work in practice, particularly if ownership and investment structures are complex. Some challenges that have become apparent with the proposed regime include as follows:

• Existing agreements that settle on or after 1 January 2026 are notifiable. However, those agreements may not have incorporated a condition that settlement is subject to ACCC approval. There is a risk that the ACCC may not clear the transaction
• A party that seeks to acquire an asset will need to have regard to its acquisitions in the previous 3 years. This assessment would include assets that were divested or disposed of in that 3-year period
• Obligations are imposed on minority shareholders, deeming them to have joint control of an asset and accordingly, requiring them to notify a transaction
• Some types of asset financing transactions need to be notified. That is, financiers may acquire an ‘asset’ to allow another party to lease that asset. Despite such assets being controlled by the lessee, a financier may still be required to notify the transaction, if the relevant thresholds are met. Separately, the lessee may also need to notify the transaction, if the relevant thresholds are met
• Acquisitions relating to the development of residential premises, and persons engaged in a business the primary purpose of which is buying, selling, leasing or developing land are exempt from the requirement to notify. However, the acquisition of an interest in a holding company that is the parent of such developers of residential premises is not subject to an exemption and must be notified to the ACCC
• A series of transactions involving new leases, agreements for lease, construction and financing of the relevant property the subject of that new lease will be complex and may require multiple notifications to the ACCC and inclusion of appropriate conditions into relevant agreements.

Other considerations

The filing fee for a notification is $56,800. The notification will enter Phase 1 which takes at least 15 business days and up to 30 business days to determine.

If a party considers that it is unlikely that a transaction will impact competition the party can file a waiver notification, the fee for which is $8,300.

The ACCC expects around 80% of acquisitions will be approved in 15 to 20 business days in Phase 1 or via the notification waiver process.

If further assessment is required, there can be a Phase 2 of up to 90 business days, which may also be extended under some circumstances. Phase 2 requires a further fee, as follows:

• $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.

The ACCC has been vested with expansive discretion. There are many procedural requirements, and transactions must not settle until such time as ACCC approval has been obtained.

Accordingly, parties will need to manage expectations and the timing of any settlement, commencement or the date on which a transaction takes effect.

Summary

The new competition law mergers and acquisitions regime presents significant challenges for businesses. It is complex. Many transactions that historically have not been the subject of competition regulatory oversight will now be notifiable. There are significant consequences for parties to any transactions that were not notified that should have been notified. There is considerable uncertainty about how the notification thresholds and exemptions will work in practice.

Parties will be required to obtain advice regarding the implications of the reforms. This includes making relevant transactions and possibly subsequent and related transactions conditional on regulatory approval.

Should you wish to discuss these merger reforms, competition laws, the notification process and relevant rights and obligations, please do not hesitate to contact us. We also deliver presentations and training to our clients on competition and consumer laws and the implications of competition law reforms.

Further information / assistance regarding the issues raised in this article is available from the author, Bill Fragos, Special Counsel, Christina Segaan, Senior Associate, or your usual contact at Moray & Agnew.