Overview of the regime's key elements 8 min read
The final regulations for Australia's new merger regime have been released. The regime applies to any deals closing on or after 1 January 2026. The latest version includes changes to the asset, serial acquisition and control thresholds and expanded exemptions.
The majority of the amendments take effect from the commencement of the new merger regime on 1 January 2026. However, some amendments only take effect from 1 April 2026 to give businesses more time to consider if their transactions are now caught. Our Insight sets out an overview of these changes.
We've also prepared a 'quick guide' covering the key elements of the regime (incorporating these most recent changes), including key thresholds, exemptions, fees, forms and timelines.
Status of the regime
The regime applies to any deals closing on or after 1 January 2026. Mandatory ACCC clearance is required for acquisitions of control (by way of completion / closing) of companies / unit trusts or acquisitions of assets (where no control test applies) that meet the various monetary thresholds, provided the target is connected with Australia. See our quick guide to the new regime for the thresholds.
New voting power thresholds
The voting power thresholds will commence on 1 April 2026. They designate four classes of acquisitions that will be required to be notified (subject to satisfying the monetary thresholds and not otherwise being exempt) despite not resulting in a change of control, at various voting thresholds (for bodies corporate, unit trusts and managed investment schemes):
- Private company: voting power increases from ≤20% to >20%.
- Private or public company: voting power increases from ≥20% to ≥50%.
- Public company (no current control): voting power increases from <20% to ≥50%.
- Public company (already controlled): voting power increases from ≤20% to >20%.
Revised asset thresholds
For deals closing on or after 1 January 2026, if the acquisition is of assets, there are two alternative thresholds depending on whether the assets form all or substantially all of the assets of a business:
- for assets forming all or substantially all of the assets of a business, the Australian revenue of the business will form the 'target revenue'.
- for assets that do not form all or substantially all of the assets of a business, only the existing transaction value test of $250 million will apply (alongside the $200 million acquirer revenue limb).
The approach of determining 'attributable revenue' by calculating '20% of the market value' of the asset will be removed entirely from the regime.
For deals closing on or after 1 April 2026, new/additional thresholds will apply for acquisitions of assets that do not form all or substantially all of the assets of a business (unless otherwise exempted):
- where the revenue of the acquirer is at least $200 million, the transaction value is at least $200 million.
- where the revenue of the acquirer is at least $500 million, the transaction value is at least $50 million.
Revised serial acquisition test
The monetary thresholds include a ‘cumulative Australian revenue’ limb to address serial acquisitions. This limb aggregates the revenue of the proposed target with the revenue of previous targets acquired by the acquirer over the last three years in the same industry.
The serial acquisition test has been amended to now exclude previous targets that (in the case of shares) the acquirer does not control or (in the case of assets) have since been divested or disposed of. This amendment reflects the fact that the acquiring entity cannot use those assets or shares to affect competitive dynamics, and also that businesses may find it difficult to maintain records for divested or disposed previous targets. Note, however, that the concept of 'control' still includes the unusual concept of 'joint control', which may capture minority investments where there is a shareholders' agreement in place. See further below.
Narrower definition of 'connected entity' (for calculating 'group turnover' for monetary thresholds)
The definition of 'connected entity' now excludes any interests where the investment is coupled with only minority protection rights. This means these investments can be excluded from 'group' wide turnover for the purposes of calculating thresholds and brings the regime closer into alignment with approaches in other jurisdictions.
Expanded exemptions
The categories of acquisitions that are exempt from notification have also been expanded and refined. Notably:
- Acquisitions of land or interests in land in the ordinary course of business are now exempt. The explanatory materials issued by the Government take a much more expansive approach to the concept of what is in the ordinary course of business as compared with the position under common case law. This is welcome. The examples included in the explanatory materials of acquisitions that could benefit from this exception include the acquisition of an interest in land for the purpose of an office, headquarters or other routine trading activities, the acquisition of office towers for the purposes of commercial property investment, a property development company acquiring land to develop residential or commercial property, retailers leasing or acquiring land for a warehouse to store their inventory, a manufacturer leasing or acquiring land for a new manufacturing facility, an energy generator acquiring land for a solar farm, or an energy distributor acquiring land to build pylons on. However, it is not intended to capture 'land banking' or certain transfers of land between competitors.
- The progressive land acquisition exemptions now also apply to 'quasi-land'. Quasi-land is intended to include certain mining, quarrying or prospecting rights, water entitlements, and rights in relation to land for forestry operations.
- Acquisitions of security interests are now exempt regardless of whether they give the acquirer the ability to control a new entity or acquire a new business. However, the enforcement of a security interest is not exempt unless it is in the ordinary course of business of providing financial accommodation and is at arm's length.
- Acquisitions by nominees and other trustees to cover acquisitions upon the conversion of capital instrument that occurs in connection with prudential loss-absorption mechanisms under APRA’s prudential standards are now exempt.
Outstanding issues
- Competitive auction processes: under the current merger laws, the ACCC public review process can only begin where there is an intention to enter into transaction agreements, meaning that if a competitive auction process is ongoing, the ACCC can't review until there is exclusivity or a preferred bidder. However, consultation on the short form or the review of a waiver application can commence earlier.
- Public market / exchange processes: there is no derogation from the suspension obligation for on-market public transactions where shares are not voted.
- Automatic voiding: transactions are automatically void if implemented without ACCC clearance. If the Government is to amend this it will not be until after March next year.
- Joint control: the definition of 'joint control' continues to be an issue. Under Australian merger laws, joint control could mean any minority interest where there is a shareholders' agreement in place that determines the composition of the board or the conduct of the affairs of the target (even if individual shareholders do not obtain control or joint control). This means acquisitions of minority interests without 'control' may need to be notified if a shareholders' agreement is in place and the monetary thresholds are satisfied. It is still not clear if or how the Government will amend this. Waivers could be sought in these circumstances.
- Global transaction threshold: a filing is required where the $250 million global transaction threshold is satisfied (as well as the combined $200 million Australian turnover threshold) if the target is 'connected with Australia.' There is no de minimis exception. We requested the Government add a $2 million target turnover minimum threshold to avoid the need to file where the target has no material presence in Australia. Despite this lobbying, we do not believe it is likely to introduce one at this stage.
Timing
- 1 December 2025: deadline for last s189 applications. We understand the ACCC is not accepting further 189 applications except for extraordinary cases (distressed asset etc).
- 23 December 2025: ACCC closes for holiday period. We understand the ACCC will continue to work on existing notifications over its shutdown period, and engage in pre-notification.
- 1 January 2026: new mandatory regime commences for deals closing on/after this date. ACCC begins to accept waiver applications.
- 12 January 2026: ACCC formal timeline commences for new regime after holiday closure period.
- 1 April 2026: new voting power thresholds and asset thresholds apply to deals closing on/after this date.
- Australian Autumn (ie from March 2026) session of parliament: potential fixes to definition of 'control' and the automatic voiding of non-notified deals, plus possible other changes.