Mergers reform – notification thresholds instrument – exposure draft

The Treasury Laws Amendment (Mergers and Acquisitions Reform) Act 2024 was enacted on 10 December 2024.

Treasury has released the exposure draft of Competition and Consumer (Notification of Acquisitions) Determination 2025 for consultation.

Public consultation on the development of these legislative instruments will support the commencement of voluntary notification from 1 July 2025. The decision to commence consultation was taken by the Government prior to the commencement of the caretaker period.

The Australian Government is reforming Australia’s merger rules and processes. This exposure draft instrument: 

• sets out the merger notification thresholds announced on 10 October 2024.
• sets additional targeted notification requirements for major supermarkets.
• give effect to the Australian Competition and Consumer Commission’s proposed notification forms.

Consultation will inform the finalisation of the draft instrument to enable government consideration.

Additional topics for feedback

Submissions on the Exposure Package generally are welcomed. We also particularly welcome stakeholders’ views on the following aspects of the exposure draft:

• Section 1-4 and Division 1 of Part 2 Contract date – these provisions apply a turnover test time linked to the ‘contract date’. Understanding how this test time would be applied in practice would be helpful to assess the workability of these provisions.
• Section 1-5 Connected Entity – this draft provision currently relies on the concepts of Associated Entities in section 50AAA and Control in section 50AA of the Corporations Act. The implications for business turnover, and examples of business relationships that this would capture that arguably should not be considered part of the corporate group of the entity, would be helpful to identify any refinement of this provision that might be required.
• Section 1-6 Connected with Australia – this draft provision defines when a share or asset is connected with Australia, including that the body corporate or entity intends to carry on a business in Australia. It would be helpful to better understand how this concept would be applied in practice and how this might affect the types of acquisitions captured under the new merger system.
• Sections 1-8, 1-9, 1-12 and 1-13 current GST turnover – these provisions use current GST turnover for determining whether the turnover thresholds are met. Understanding how practical this turnover concept is for businesses to calculate and apply as well as implications for non-input taxed supplies would be helpful to identify any refinement of this concept that might be required.
• Sections 1-10 and 2-3 Creeping or serial acquisitions – this provision applies an accumulated turnover test based on ‘same or substitutable goods or services’ to capture serial acquisitions. Understanding how this test would apply in practice would be welcome.
• Section 1-10 Accumulation of creeping or serial acquisitions – for the purposes of accumulation, this draft provision excludes transactions that have been notified to the ACCC, except for those notified through the creeping or serial acquisitions tests. It would be helpful to better understand the implications of this approach.
• Division 2 of Part 2 Exemptions for certain acquisitions of shares or assets –the draft instrument provides exemptions from notification for certain types of acquisitions of shares or assets that are not likely to result in a lasting change to the competitive structure of a market, unlikely to affect competition, and/or to avoid disruptions to capital markets and other activities. Should other types of acquisitions of shares or assets be exempt from the merger system on this same basis?
• Section 2-20 Land exemption – this draft provision provides exemptions from notification for land acquisitions involving residential property development and certain commercial land acquisitions by property developers and investors. Is the provision clear on which types of land acquisitions are exempt from notification?
• Division 1 of Part 3 Supermarkets classes of acquisitions – Division 1 of the draft instrument requires all acquisitions of supermarket businesses and certain land acquisitions by major supermarkets to be notified to the ACCC. Is the scope of the supermarkets classes of acquisitions appropriate to address competition concerns in the supermarkets sector?
• Divisions 2 and 3 of Part 6 Notification forms – these divisions of the draft instrument give effect to the ACCC's proposed notification forms. Do the notification forms strike the appropriate balance between the information required by the ACCC for its competition assessments and the burden imposed on merger parties to provide this information? The ACCC’s provisional guidance for when it may be appropriate for merger parties to complete the long form is available on the ACCC website. A finalised version will be included later in guidance that will accompany the notifications forms.

Stakeholder engagement

Consultation processes during the caretaker period will be undertaken in accordance with the Caretaker Conventions.