A New Era for Competition Policy

The Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill 2024, which passed the Senate late last year represents a landmark shift in how Australia regulates mergers and acquisitions. These reforms are part of the Government's broader economic strategy focusing on "relief, repair, and reform" and aim to create a more dynamic and productive economy.

"This marks the most significant change to Australia's merger regime since the Trade Practices Act was enacted 50 years ago," said ACCC Chair Gina Cass-Gottlieb. "We have consistently outlined why the changes are necessary to achieve effective merger control in Australia and ensure there is strong competition across our economy."

Key Changes to the Merger System

Under Australia's current system, companies aren't required to notify the ACCC before proceeding with acquisitions, and there's no obligation to wait for regulatory clearance. The new framework fundamentally changes this approach with several important features:

The ACCC becomes the primary decision-maker for merger approvals, with mandatory notification requirements for transactions above certain thresholds.

Transactions will undergo a two-phase review process. For straightforward cases raising no competition concerns, the ACCC expects about 80% of mergers to be cleared within 15-20 business days.

Companies must now wait for ACCC approval before completing notifiable transactions, with significant penalties for failure to comply.

The new system provides greater transparency through a public acquisitions register that includes details of notifications and ACCC determinations.

Special provisions help the ACCC better address "serial acquisitions" where a series of smaller transactions over time may cumulatively harm competition.

Who Will Be Affected

Not all mergers will require notification. The system targets transactions most likely to raise competition concerns through three main thresholds:

• Large mergers where combined Australian turnover exceeds $200 million, and either the target has Australian turnover above $50 million or the global transaction value exceeds $250 million

• Very large businesses (Australian turnover over $500 million) acquiring smaller businesses with Australian turnover above $10 million

• Serial acquisitions where combined Australian turnover exceeds $200 million and the cumulative Australian turnover from acquisitions in similar sectors over a three-year period reaches $50 million (or $10 million if a very large business is involved)

These thresholds will be reviewed 12 months after the new system takes effect.

Balancing Business Needs and Consumer Protection

The Government emphasises that most mergers benefit the economy and will proceed more efficiently under the new system. According to the Business Council of Australia, over 90% of mergers assessed by the ACCC are cleared and help drive better economic outcomes.

Treasurer Jim Chalmers described the reforms as creating a system that is "faster, stronger, simpler, more targeted and more transparent." He said that while most mergers have genuine benefits, the new regime will more effectively target anti-competitive mergers that could harm consumers and businesses.

For the business community, the ACCC has committed to working closely with stakeholders during the transition period. "We are acutely aware that successful implementation will be crucial to the overall success of the new regime," said Cass-Gottlieb. "We will be working and consulting with businesses and other stakeholders to ensure parties have clarity on timeframes and processes."

[1] https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/merger-reform-more-competitive-economy

[2] https://ministers.treasury.gov.au/ministers/andrew-leigh-2022/articles/opinion-piece-labors-making-merger-law-fit-modern-economy

[3] https://thenightly.com.au/business/treasurer-jim-chalmers-announces-biggest-overhaul-in-50-years-of-australias-merger-laws-c-14250416

[4] https://www.accc.gov.au/business/mergers-and-acquisitions/merger-reform

[5] https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r7257

[6] https://treasury.gov.au/sites/default/files/2024-07/c2024-554547-factsheet.pdf

[7] https://www.gtlaw.com.au/insights/its-here-everything-you-need-to-know-about-the-merger-reform-legislation

[8] https://www.accc.gov.au/media-release/accc-welcomes-passage-of-historic-merger-laws#:~:text=Currently%20Australia's%20merger%20regime%20does,the%20ACCC's%20administrative%20decision%20making.

[9] https://ministers.treasury.gov.au/ministers/andrew-leigh-2022/media-releases/biggest-reforms-merger-settings-half-century-pass-senate#:~:text=Under%20the%20new%20regime%2C%20there,regime%20from%201%20July%202025.