Reforming Australia’s Merger Clearance Process: Navigating the New Mandatory Review Regime

Australia’s merger clearance process is undergoing significant reform, driven by longstanding concerns the current voluntary, informal regime does not sufficiently prevent anticompetitive mergers.

After petitioning from the Australian Competition and Consumer Commission (ACCC) and an engaged response from the Federal Government, Australia is now transitioning to a mandatory administrative clearance regime designed to create a more accountable merger review system.

Key Reforms Include

Mandatory Notification and Administrative Clearance

Under the new regime, all acquisitions which meet prescribed thresholds or are otherwise designated by legislative instrument will require formal notification to the ACCC.

The new system began on a voluntary basis on 1 July 2025 and becomes mandatory on 1 January 2026. This change aims to ensure that all mergers falling within prescribed thresholds are subject to regulatory scrutiny.

Statutory Timeframes and Prescribed Filing Requirements

The new framework introduces clear statutory timeframes for each stage of the review process. This reformed process provides a structured timeline: from initial notification to Phase 1 decisions, if needed, a more detailed Phase 2 examination and third, public benefits assessment.

By setting these deadlines, the ACCC intends to enhance predictability and efficiency in reviewing mergers.

Expanded “Substantial Lessening of Competition” (SLC) Test

One of the most notable changes under the new merger review system is the expansion of the SLC test. The scope of the SLC test has become broader to assess whether a merger would create, strengthen, or entrench a substantial degree of market power.

Importantly, it includes a retrospective review that considers the cumulative effect of earlier acquisitions over a three-year period. This measure aims to target serial or creeping acquisitions that could collectively diminish competition.

Enhanced Accountability and Documentation Requirements

The reformed regime requires businesses to submit comprehensive information and robust documentation. Pre-notification engagement with the ACCC is encouraged to ascertain whether short or long notification forms should be used.

This is intended to reduce instances of incomplete or misleading submissions and improve overall transparency.

Fee Structure and Penalties

The new system adopts a cost-recovery fee model scaled to the complexity of the merger review, aiming to ensure that high-risk and complex deals bear appropriate costs.

Moreover, stringent penalties have been introduced for breaches of the new notification and informative requirements, reinforcing the importance of compliance.

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Preparing for the Future of Competition and M&A

These reforms mark a decisive shift toward a more rigorous competition framework in Australia.

Legal practitioners must be prepared for increased scrutiny and extended timelines, particularly for large and complex mergers.

As the new mandatory system takes effect in 2026, staying informed and adjusting merger strategies will be crucial for all stakeholders in the Competition and M&A landscape.

For a deeper analysis of merger laws and all facets of competition law in Australia, visit Practical Guidance Competition. To stay informed about the latest legal insights and regulatory trends, subscribe to our Practice Area Roundups.