The much-anticipated bill to reform Australia’s merger laws has been tabled in Parliament, providing further clarity on the future of the country’s competition laws.
In a statement on Thursday, Treasurer Jim Chalmers outlined the Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill 2024 aims to create a regime that will more effectively target anti-competitive mergers while allowing pro-competitive mergers to proceed faster.
Subject to the passage of the legislation, the new regime will come into effect from 1 January 2026, but will allow merger parties to start using the new regime on a voluntary basis from 1 July 2025.
“This bill will bring Australia’s merger system into the 21st century and make it easier for the majority of mergers to be approved quickly, so the Australian Competition and Consumer Commission (ACCC) can focus on the minority that give rise to competition concerns,” Chalmers said.
Addressing the Parliament in a second reading of the bill on Thursday, Treasurer Chalmers explained Australia is one of three OECD countries that doesn’t currently require compulsory notification of mergers.
“This legislation will bring our merger system into the 21st century,” he said. “The legislation will improve our regime in five ways, by making the system faster, stronger, simpler, more targeted and more transparent.”
Essentially, the merger laws, according to the Treasurer, will allow the ACCC to review all the mergers that they have been typically concerned about.
On the advice of the ACCC chair, Chalmers said the government intended to get the competition regulator to review purchases of an interest above 20 per cent in an unlisted or private company, if one of the companies involved in the deal has a turnover of more than $200 million.
“This is all about lifting the level of scrutiny and transparency for private markets transactions, which have boomed in Australia in the past decade,” Chalmers said.
“It will give the ACCC the ability to analyse changes of control in private companies to ensure negative competition effects are avoided and to scrutinise these deals in more detail.”
Welcoming the introduction of the bill in Parliament, the ACCC’s chair, Gina Cass-Gottlieb, said: “The ACCC is committed to the successful implementation of these reforms.”
At the moment, only a small proportion of the estimated 1,000–1,500 mergers that occur each year are communicated to the ACCC, and some 93 per cent of those are assessed on a confidential basis.
“Part of making these reforms a success will be ensuring businesses have clarity on their obligations, the time frames they can expect, and other key aspects of the process,” Cass-Gottlieb said.
The sweeping merger reforms were first announced in April this year and draft legislation was subsequently opened for consultation in July.
In August, the government further unveiled new notification thresholds to determine which mergers and acquisitions must be disclosed to the ACCC before completion.
The Treasurer clarified on Thursday that as earlier agreed, the merger thresholds will trigger review if the combined Australian turnover exceeds $200 million and the acquired business or assets have a turnover above $50 million or a global transaction value over $250 million.
Mergers involving large businesses with over $500 million in Australian turnover acquiring smaller firms with over $10 million turnover will also be scrutinised. Additionally, serial acquisitions by businesses with over $200 million in turnover that reach $50 million over three years, or $10 million if a very large business is involved, will be subject to review.
