Merger approvals are now compulsory in Australia following significant changes to competition law that took effect on 1 January 2026. The Australian Competition and Consumer Commission (ACCC) now requires businesses to obtain clearance before completing certain mergers and acquisitions. This marks a fundamental shift from the previous voluntary notification system.
Under the new regime, businesses cannot finalise qualifying transactions without formal ACCC approval. Companies that proceed without authorisation face substantial penalties and potential unwinding of completed deals. Every business considering a merger or acquisition must understand these new requirements.
The reform aims to prevent anti-competitive mergers before they occur rather than relying on post-merger reviews. This represents one of the most significant changes to Australian merger control in decades, aligning Australia with international practices in jurisdictions like the European Union and United Kingdom.
What Transactions Require Merger Approvals?
The mandatory regime applies to acquisitions that meet specific monetary thresholds. Transactions require ACCC approval when the combined Australian turnover of the merger parties exceeds $200 million, or when the target business has Australian turnover exceeding $50 million.
Additional thresholds apply to specific sectors deemed strategically important. These include telecommunications, media, banking, and healthcare industries where lower thresholds may trigger notification requirements. The government can also prescribe additional sectors through regulation.
Asset acquisitions, share acquisitions, and other forms of control changes all fall within scope. Joint ventures and minority stake acquisitions may also require approval if they result in one party acquiring control or substantial influence over another business.
The Application Process and Timelines
Businesses must submit a formal application to the ACCC before completing their transaction. The application requires detailed information about the parties, the transaction structure, relevant markets, and potential competitive effects.
The ACCC operates a two-phase review process. Phase 1 reviews take up to 30 business days, during which the ACCC conducts an initial assessment. If concerns arise, the review progresses to Phase 2, which allows up to 90 business days for detailed investigation.
Parties can request expedited review for straightforward transactions unlikely to raise competitive concerns. The ACCC may grant clearance within 15 business days for these applications. However, incomplete or complex applications will not qualify for expedited treatment.
Understanding the Assessment Criteria for Merger Approvals
The ACCC evaluates whether a proposed merger would substantially lessen competition in any Australian market. This test remains consistent with previous law, but the mandatory regime ensures scrutiny occurs before completion.
Factors considered include market concentration, barriers to entry, the likelihood of coordinated conduct, and vertical integration effects. The ACCC examines whether the merger would eliminate a vigorous competitor or create opportunities for anti-competitive behaviour.
Public benefits can also feature in the assessment. The ACCC may authorise mergers that substantially lessen competition if they deliver net public benefits. Such benefits might include efficiency gains, innovation improvements, or cost reductions passed to consumers.
Consequences of Non-Compliance
Operating without required approval constitutes a serious breach of competition law. The Federal Court can impose civil penalties up to $50 million per contravention for corporations. Individuals involved may face penalties up to $2.5 million.
Beyond financial penalties, the ACCC can seek orders requiring divestiture of acquired assets or shares. Courts have broad powers to unwind completed transactions, potentially creating significant commercial disruption and value destruction.
Criminal penalties may apply in cases involving deliberate circumvention of the regime. Company officers who authorise completion without required approval risk personal liability including potential imprisonment.
Practical Steps for Businesses
Companies considering acquisitions should engage legal advisors early in transaction planning. Assessment of notification requirements must occur during due diligence, well before signing binding agreements.
Transaction agreements should include appropriate conditions precedent relating to merger approval. Parties need adequate time buffers to accommodate the ACCC review process without jeopardising deal certainty.
Preparation of comprehensive applications increases prospects of timely clearance. Businesses should compile market data, customer information, and competitive analysis before lodging applications. Proactive engagement with the ACCC can clarify concerns and streamline the process.
International Considerations
Australian businesses involved in cross-border transactions may face multiple merger filing obligations. Coordination between different competition authorities becomes essential to manage overlapping review processes.
Timing discrepancies between jurisdictions can create challenges. Businesses should develop integrated regulatory strategies addressing all relevant merger control regimes simultaneously rather than sequentially.
Different substantive tests and procedural requirements across jurisdictions require careful navigation. What clears in one country may face opposition elsewhere, necessitating contingency planning and flexible deal structures.
Conclusion
Merger approvals have fundamentally changed how Australian businesses approach acquisitions and corporate transactions. The mandatory regime requires careful planning, thorough preparation, and realistic timeframes to achieve successful outcomes. Companies must integrate competition law compliance into their transaction strategies from the earliest stages.
Businesses operating in Australia can no longer treat merger control as an afterthought. The new system demands proactive assessment, comprehensive applications, and genuine engagement with the regulatory process.
Professional legal advice has become essential for navigating these requirements effectively. For businesses considering restructures or other corporate changes, understanding relevant regulatory frameworks remains critical to successful execution.
FAQs
1. Do all business acquisitions require ACCC approval?
No, only transactions meeting specified monetary thresholds require mandatory approval. Small acquisitions below these thresholds do not trigger notification obligations.
2. How long does the merger approval process typically take?
Phase 1 reviews take up to 30 business days, while Phase 2 investigations can extend to 90 business days. Expedited reviews may conclude within 15 business days.
3. Can parties complete a merger while waiting for ACCC approval?
No, completing a transaction before receiving approval constitutes a breach of law. Parties must wait for formal clearance before finalising their deal.
4. What happens if the ACCC refuses to approve a merger?
The parties cannot proceed with the transaction as proposed. They may restructure the deal, offer undertakings to address concerns, or abandon the transaction entirely.
5. Are foreign-to-foreign mergers subject to Australian approval requirements?
Yes, if the transaction meets the monetary thresholds based on Australian turnover or involves Australian assets. Offshore transactions affecting Australian markets require ACCC clearance.