New rules introduce mandatory notification thresholds, giving the ACCC greater power to oversee mergers and acquisitions
The Australian government has passed the Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill 2024 through the House of Representatives, setting the stage for significant changes to the nation’s competition framework.
The legislation aims to modernise Australia’s merger regime, which has remained largely unchanged for decades, and establish new notification thresholds for mergers and acquisitions.
Treasurer Jim Chalmers (pictured above) called the reforms a “major milestone” in building a more competitive and productive economy, describing the existing system as outdated and ineffective at preventing anti-competitive mergers.
“These reforms are the largest shakeup of Australia’s merger settings in half a century,” Chalmers said in a statement on Thursday. “The current ‘ad hoc’ merger process is unfit for a modern economy, lagging best practice in comparable countries.”
Under the new rules, a mandatory notification system will replace the voluntary framework currently in place. The Australian Competition and Consumer Commission (ACCC) will be tasked with approving or rejecting mergers that meet specific monetary thresholds, removing its current role as an adviser to the courts.
The bill establishes three monetary thresholds for mandatory notification, a shift from earlier proposals that included market share criteria. Mergers must be notified if the combined Australian turnover of the entities exceeds $200 million and the target’s domestic turnover is above $50 million or the global transaction value surpasses $250 million.
Acquirers with a turnover above $500 million must notify the ACCC if the target has a turnover of more than $10 million. Serial acquisitions or “creeping mergers” will be captured when a company with turnover above $200 million makes multiple acquisitions in the same sector, collectively exceeding $50 million over three years.
Land acquisitions related to residential property development and some commercial property purchases will generally be excluded, with targeted exceptions. The thresholds were designed to focus the ACCC’s scrutiny on significant mergers while reducing the burden on smaller transactions.
The reforms come amid increasing scrutiny of Australia’s merger laws, with critics arguing that the current voluntary notification system allows anti-competitive deals to slip through the cracks.
Australia is one of only three OECD countries without mandatory merger notification requirements.
The ACCC has long advocated for stronger powers to review mergers, citing concerns about rising market concentration in industries such as banking and retail. The new legislation provides the regulator with enhanced oversight, aligning Australia’s system with global best practices.
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