On 10 April 2024, the Australian Competition and Consumer Commission (ACCC) announced that the highly anticipated outline of a new competition law merger control regime was to be released. Later that day, the Federal Treasurer released further details as outlined in the publication from Treasury entitled “Merger Reform: A Faster, Stronger and Simpler System for a More Competitive Economy”.
A formal Exposure Draft of the legislation is expected to be released later this year, with the new regime kicking off on 1 January 2026.
Currently Australia’s merger regime does not require merger parties to notify the ACCC of proposed acquisitions or to wait for ACCC clearance before proceeding. Therefore, one of the most unsurprising aspects of this proposed new regime, is that the proposed reforms include introducing a mandatory notification requirement for merger deals above certain thresholds, and a prohibition on merger transactions proceeding without receiving a determination from the ACCC or Competition Tribunal.
It is expected that the merger laws will also be updated to better deal with serial acquisitions, where a number of smaller transactions occur over time that result in a cumulative adverse effect on competition. As outlined in the Treasury publication, the substantive ‘substantial lessening of competition’ analysis applied to merger reviews, requires consideration of the closeness of competition between the merger parties, to understand what is lost as a result of the merger. To respond to concerns regarding serial or creeping acquisitions and roll up strategies, the cumulative effect of all mergers within the previous three years by the merger parties may be considered as part of the assessment of the notified merger, whether or not those mergers were themselves individually notifiable … “This is a targeted measure to address concerns that some businesses are engaging in anticompetitive roll up strategies that increase prices and reduce quality and choice for consumers yet minimise unintended impacts on Australia’s vibrant start-up and small-and-medium enterprise sector. Three years is considered an appropriate reference period to capture strategic business behaviour and take account of dynamic conditions of competition in markets.”
The Treasury has promoted the new regime as being faster, stronger, simpler and more transparent. The Exposure Draft of the proposed legislation is awaited.
A formal Exposure Draft of the legislation is expected to be released later this year, with the new regime kicking off on 1 January 2026.
Currently Australia’s merger regime does not require merger parties to notify the ACCC of proposed acquisitions or to wait for ACCC clearance before proceeding. Therefore, one of the most unsurprising aspects of this proposed new regime, is that the proposed reforms include introducing a mandatory notification requirement for merger deals above certain thresholds, and a prohibition on merger transactions proceeding without receiving a determination from the ACCC or Competition Tribunal.
It is expected that the merger laws will also be updated to better deal with serial acquisitions, where a number of smaller transactions occur over time that result in a cumulative adverse effect on competition. As outlined in the Treasury publication, the substantive ‘substantial lessening of competition’ analysis applied to merger reviews, requires consideration of the closeness of competition between the merger parties, to understand what is lost as a result of the merger. To respond to concerns regarding serial or creeping acquisitions and roll up strategies, the cumulative effect of all mergers within the previous three years by the merger parties may be considered as part of the assessment of the notified merger, whether or not those mergers were themselves individually notifiable … “This is a targeted measure to address concerns that some businesses are engaging in anticompetitive roll up strategies that increase prices and reduce quality and choice for consumers yet minimise unintended impacts on Australia’s vibrant start-up and small-and-medium enterprise sector. Three years is considered an appropriate reference period to capture strategic business behaviour and take account of dynamic conditions of competition in markets.”
The Treasury has promoted the new regime as being faster, stronger, simpler and more transparent. The Exposure Draft of the proposed legislation is awaited.