Labor to unveil biggest merger reforms 'in almost 50 years'
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The news: Federal Treasurer Jim Chalmers is set to announce the biggest merger reforms in Australia "in almost 50 years" on Wednesday, with a new merger control system to apply from 1 January 2026.
The numbers: Australia is one of three OECD countries that doesn’t require compulsory notification of mergers, and merging businesses do not currently have to notify the competition regulator or wait for its view before completing a merger.
Last year, over 1,400 mergers were recorded in Australia at a value of around $300 billion. The Australian Competition and Consumer Commission (ACCC) looked at an average of 330 mergers a year over the past decade – around a quarter of the total.
The context: The government's reformed merger system will include the introduction of a mandatory and suspensory administrative system, with the ACCC as the first-instance decision maker. In this system, mergers may proceed unless the ACCC reasonably believes it is likely to substantially lessen competition.
The competition regulator will also be responsible for a single merger control pathway, replacing the current three, ad hoc, voluntary pathways, with all mergers above a threshold being subject to the system.
ACCC merger reviews will be risk-based, and those subject to review will be charged cost recovery fees, scaled to reflect the complexity and risk of the merger. Bringing Australia in line with other jurisdictions overseas, fees are likely to be in the range of $50,000 to $100,000, but small businesses will be exempt.
The new system will allow mergers to proceed within 30 working days where no competition concerns are raised by the ACCC, with the option of "fast-track" determination if no concerns are identified after 15 working days.
The ACCC will also identify the up-front information needed for mergers, maintain a public register of all merger reviews, and publish reasons for determinations.
The shake-up comes after the government asked the Competition Review to assess whether Australia's merger control system is fit for purpose. The Competition Review found that Australia's current "ad hoc" merger process is "unfit for a modern economy" and "lagging best practice in comparable countries".
The source: The Treasury media release
