Parliament passed the Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill 2024 on Thursday night, marking the most significant change to Australia’s merger regime since the Trade Practices Act was enacted half a century ago.
The new rules won’t kick into effect until 1 January 2026, but companies will be able to use them on a voluntary basis from 1 July next year.
Currently, merger rules don’t require merger parties to notify the Australian Competition and Consumer Commission (ACCC) of proposed acquisitions or to wait for clearance by the regulator before proceeding with the acquisition.
However, under the new process, all transactions above a prescribed threshold must be notified to the ACCC.
Commenting on the bill’s passage, the ACCC said it is intensifying its focus to ensure that implementation of the new merger regime is successful when it commences.
“We recognise that this will be a very significant change for the business community and indeed, the ACCC,” chair Gina Cass-Gottlieb said in a statement issued by the regulator.
“We have consistently outlined why the changes are necessary to achieve effective merger control in Australia and ensure there is strong competition across our economy, driving dynamism, productivity and restraint on prices for the benefit of consumers and business.”
Cass-Gottlieb emphasised the competition regulator’s awareness that successful implementation will be key to the overall success of the new regime.
“Therefore we are working very hard to carry out this important preparation work which we have outlined in the recently released statement of goals,” she said.
“As part of this, we will be working and consulting with businesses and other stakeholders to ensure parties have clarity on time frames and processes, and that the new regime achieves its intended benefits of increased efficiency and transparency.”
In addition to moving to a mandatory notification system, the ACCC said the new laws will provide it with the tools to better deal with “serial acquisitions”, where a number of smaller transactions occur over time that cumulatively end up causing serious harm to competition.
It will also provide for greater transparency for business and the broader community on all mergers considered by the ACCC, including by requiring the ACCC to publish reasons for all final merger decisions.
The Treasurer, in addition, will have the power to designate certain high-risk sectors and impose specific notification thresholds for those sectors.
“As we celebrate these important reforms becoming law, we also are mindful of the importance of supporting a smooth transition as the new regime is bedded down,” Cass-Gottlieb said.
“We will work closely with key stakeholders and will issue draft guidelines for consultation in early 2025 to assist businesses and stakeholders adapt to the new merger regime.”
On Thursday night Treasurer Jim Chalmers described the new regime as “faster, stronger, simpler, more targeted and more transparent”.
“These reforms are the largest shake up of Australia’s merger settings in half a century and a big part of a new wave of competition policy which is all about making our economy more dynamic and productive,” Chalmers said in a statement.
While noting that most mergers are an important feature of a healthy economy, the Treasurer warned that some can cause harm to competition.
“The new regime will more efficiently and effectively target mergers that are anti‑competitive, while allowing mergers that are pro‑competitive to proceed faster.”
