Subject to being passed in Parliament, the reforms are expected to come into effect on 1 January 2026. It is anticipated that the draft legislation for these reforms will be released at the end of 2024.
2. Competition Test
Companies will have to notify the ACCC of all proposed transactions valued above a certain threshold. In order for a transaction to proceed, the ACCC will need to reasonably believe that the transaction will not substantially lessen competition in the relevant market. If the ACCC considers that the transaction may substantially lessen competition or will create, strengthen or entrench significant market power, it may not proceed. It is anticipated that the majority of transactions will not require review due to falling below the notification thresholds.
3. Merger Thresholds
The monetary thresholds to be applied have not yet been published, however the Treasurer has confirmed that they will be based on “international practise and set through consultation”. The Federal Government have also assured that they will consult with stakeholders to finalise the details before the changes commence in January 2026.
4. Timeframes
The Government has indicated where the ACCC considers that a proposed merger does not pose a threat to competition, approvals will be issued within 30 working days, with an option of ‘fast track’ determination if no concerns are identified after 15 working days. Where competition concerns are raised, the ACCC will undertake an in-depth assessment within a 4-and-a-half-month period before issuing their decision.
5. Cost of Approval
Mergers which are subject to review by the ACCC will be charged cost recovery fees, scaled to reflect the complexity of the review and risk. Fees are estimated to range from $50,000 to $100,000, with transactions subject to tribunal review attracting additional fees. Exemptions will be available for small businesses.
The reforms will enable the ACCC to approve a transaction subject to conditions. For example, the ACCC may require an enforceable undertaking under section 87B of the CCA from merger parties, which would seek to address the ACCC’s concerns regarding the transaction.
7. Transparency
The ACCC will establish a public register of mergers and acquisitions reviewed by the ACCC and providing details of decisions made and their reasoning.
8. Penalties
A failure to notify the ACCC of a notifiable merger or proceeding with a merger prior to receiving the ACCC’s determination may result in substantial civil or criminal penalties for the entity concerned and the officers/executives responsible for the merger. Penalties may also be applied for the provision of false or misleading information to the ACCC. Additionally, any transaction undertaken other than in accordance with an ACCC determination will be void, and the ACCC may seek orders for divestiture or for the transaction to be declared void if false and misleading information was provided or there was a material omission by the parties.
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