Australian mergers and acquisitions enter a new era in South Australia

Australia’s new merger regime marks a significant shift in how acquisitions are assessed, presenting both challenges and opportunities for businesses. The Australian Competition and Consumer Commission (ACCC) recently released draft guidance outlining how acquisitions will be evaluated under the new regime, calling for feedback from stakeholders.

Under the new regime, acquisitions that are considered contentious will undergo a thorough assessment process. Businesses planning larger acquisitions that are expected to take longer than six months to complete should start preparing for the new merger control regime, set to commence voluntarily from 1 July 2025. The ACCC anticipates approving around 80 percent of acquisitions within 15 to 20 business days, while acquisitions posing minimal competition risks may receive early approval or be granted a waiver from notification requirements.

The consultation period for the draft guidance ends on 28 April 2025, with input expected from key stakeholders. The new merger regime, which came into effect on 28 November 2024 through the Treasury Laws Amendment (Mergers and Acquisitions Reform) Act 2024, represents the most significant changes to merger laws in over half a century. The shift from a voluntary, informal review process to a mandatory and suspensory notification regime introduces several key changes, including mandatory notification thresholds based on transaction values and turnover, a requirement to obtain ACCC clearance before proceeding with notifiable mergers, severe penalties for non-compliance, and the establishment of a public register for all notifiable mergers and acquisitions.

Moreover, there are pre-determined timeframes for ACCC reviews, and the ACCC now has the authority to review mergers within high-risk industries. The regime applies to transactions finalized after 1 January 2026, with transitional arrangements allowing parties to opt into the new system from 1 July 2025 onwards. These changes will have a significant impact on mid-market businesses, requiring careful consideration to ensure sustained growth and competitiveness in the evolving M&A landscape.

Under the new regime, any acquisition meeting specific thresholds must be notified to the ACCC and cannot be completed until clearance is obtained. Failure to comply can result in severe penalties. The monetary thresholds for notification are based on the combined Australian turnover of the merger group, global transaction value, and the acquirer group’s Australian turnover. Specific notification thresholds are expected to be outlined for different sectors and acquirers to ensure comprehensive oversight by the ACCC.

The new regime also applies to property transactions, including land acquisitions. A proposed exemption from notification exists for certain land acquisitions related to residential property development or non-commercial land operations. Serial acquirers will undergo a three-year cumulative test, requiring notification of additional transactions meeting specific criteria.

Ultimately, the new merger regime marks a significant shift in how acquisitions are regulated in Australia, requiring businesses to adapt to the evolving landscape and navigate the complexities of the updated framework. It is essential for organizations to familiarize themselves with the new requirements and ensure compliance to seize the opportunities inherent in the changing M&A environment.