Australia is implementing a mandatory and suspensory merger control regime starting January 1, 2026, under Parts IV and IVA of the Competition and Consumer Act 2010 (Cth). The system uses monetary thresholds rather than market share tests to determine when deals require review. The Australian Competition and Consumer Commission (ACCC) oversees the process, which applies to acquisitions of shares or assets connected to the country. This shift replaces a previous voluntary system, making compliance a strict requirement for any transaction meeting specific financial criteria.
New Rules for Deal Notification
The new framework triggers notifications based on the value of assets or shares involved in a transaction. For share acquisitions, the regime captures deals where a buyer gains control, which is defined as the ability to determine financial and operating policies. This definition is broad; it includes negative control, such as significant veto rights, and joint control with associates under the Corporations Act. Share purchases that do not result in control must still be reported if they cross specific voting power thresholds. Acquisitions of discrete assets follow a different path, as no control test applies to them.
Parties can combine notifications for interrelated transactions to simplify the process, provided they are executed together. The regime is economy-wide but currently includes special rules for the supermarket sector. Other industries could face similar sector-specific requirements if designated by the government. Foreign investment is handled separately under the Foreign Acquisitions and Takeovers Act 1975 (Cth), where the Treasury generally refers applications to the ACCC for competition screening as part of the national interest test.
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Calculating the Value of a Deal
Officials determine if an acquisition requires review by looking at the financial metrics at the time of the deal, regardless of the duration. The Australian revenue of the target entity includes gross revenue from the last 12-month financial period attributable to Australian transactions. Connected entities, such as related bodies corporate, must also have their revenue counted to avoid double counting. For discrete asset purchases, the relevant value is the higher of the total market value of the assets or the consideration received for them.
Converting foreign currency to Australian Dollars requires using an average exchange rate from the Reserve Bank of Australia or a publicly available market rate. The specific date for the rate depends on whether the calculation involves the target’s revenue or the transaction value. These thresholds are indexed annually to account for inflation and economic changes. The government has signaled further adjustments to the definition of control and the automatic voiding rules for unnotified acquisitions later this year.