ACCC Mandatory Merger Control Regime: what it means for SME exits

From 1 January 2026, mergers or acquisitions that meet certain thresholds must be reported to the ACCC and require the ACCC’s approval before the sale or purchase can proceed. If the ACCC considers that the acquisition would result in, or is likely to result in, a substantially lessening of competition, the ACCC may put a stop to a transaction entirely.  

If you are a SME business thinking about selling your business, consider whether the acquirer will need to seek the ACCC’s approval. The ACCC’s approval process can be lengthy. It is important to build in enough time to allow the transaction to settle smoothly. Parties risk the transaction being automatically void and major penalties if a transaction settles without ACCC approval.

This article explains what SME businesses should consider before entering into a transaction, including:

• when a transaction must be notified by an acquirer;

• whether the notification requirement could be waived; and  

• some practical tips.  

When is a notification required?

The Competition and Consumer Act 2010 (Cth) (Act) requires the acquirer (either a large merged firm or a very large acquirer) to notify a transaction to the ACCC if the transaction meets certain monetary thresholds. The thresholds refer to Australian revenue attributable to transactions or assets in Australia or transactions into Australia for the most recent 12-month financial reporting period.

For SME businesses, consider whether your business is being acquired by either a large merged firm or a very large acquirer.

1. Report if transaction meets these monetary thresholds.
‍

1.1 Acquisition by a large merged firm.

• Acquirer, target and each of their connected entities have an Australian revenue of ≥ $200 million; and either

• The target’s Australian revenue is ≥ $50 million; or  

• The global transaction value is ≥ $250 million.

1.2 Acquisition by a very large acquirer.

• The acquirer group has Australian revenue of ≥ $500 million; and

• The target’s Australian revenue is ≥ $10 million.
  ‍

A separate cumulative threshold applies to serial acquisitions. The notification bar is ‘lowered’ where an acquirer makes a series of acquisitions. A serial acquisition which meets the thresholds below must also be reported. For example, provided the below thresholds are met, notification would be required even in circumstances an SME business has relatively low Australian revenue (provided that Australian revenue is above $2 million).

2. Report if transaction is a serial acquisition.
‍

2.1 Acquisition by a large merged firm.

• Acquirer, target and each of their connected entities have an Australian revenue of ≥ $200 million AUD; and

• The cumulative Australian revenue from acquisitions in the last three years that predominantly involves the same or substitutable goods or services of ≥ $50 million.

2.2 Acquisition by a very large acquirer.

• Acquirer, target and each of their connected entities have an Australian revenue of ≥ $500 million; and

• The acquirer has cumulative Australian revenue from acquisitions in the last three years that predominantly involve the same or substitutable goods or services of ≥ $10 million.

2.3 Previous acquisitions which do not count.

• acquisitions already notified to the ACCC (except those notified under the serial acquisitions threshold);

• acquisitions below $2 million Australian revenue;

• acquisitions of certain assets below $2 million market value;

• acquisitions of assets that are no longer held by the acquirer or its connected entities;

• acquisitions of shares where neither the acquirer nor its connected entities have control; and

• acquisitions not connected with Australia.
  ‍

‍‍‍Are any transactions exempted even if they meet the thresholds?

Not all transactions need to be reported to the ACCC. For example, an acquirer does not need to notify the ACCC if they do not obtain control of the target as a result of the acquisition, if the acquirer already controlled the target before the acquisition.  

No notification is required for acquisitions of 20% or less of the voting power in an Australian listed company, listed scheme or a large unlisted company.

In addition, the ACCC has specified the following acquisitions do not need to be reported.

1. Land exemptions.

Including:

• land acquired as part of ordinary business activities;

• land used for residential property development;

• land bought, sold or leased by businesses as part of their core operations;

• lease renewals or extensions; and

• sale and leaseback arrangements.

2. Financial market exemptions.

Many everyday financial and funding transactions do not require notification, provided they do not give the acquirer control of the target, including:

• clearing and settlement activities in financial markets;

• capital raising activities, such as rights issues, underwriting, share buy-backs and dividend reinvestment plans;

• common financing arrangements, including loans, debt instruments, derivatives and security interests; and

• asset financing and securitisation arrangements carried out on normal commercial terms.

3. Other exemptions.

Including:

• acquisitions by insolvency practitioners or statutory appointees;

• transfers within superannuation arrangements, including changes of trustee; and

• acquisitions that occur automatically under Commonwealth, State, or Territory law.
  ‍

When should an acquirer notify?

The acquirer needs to notify the ACCC once the transaction is no longer speculative – for instance, when the heads of agreement are signed, or the full transaction documents are signed.  

Can the notification be waived?

Parties may consider making a notification waiver application if the transaction must be reported, or if parties are unsure whether it should be reported.  

The new mandatory reporting requirements add to the existing laws in section 50 of the Act, which prohibit an acquisition that substantially lessens competition (for example, by removing a vigorous and effective competitor, or increasing concentration in the market).

Under a notification waiver application, the ACCC may decide that the acquisition does not need to be reported because the proposed transaction does not raise meaningful competition concerns and does not substantially lessen competition. The transaction can be cleared quickly, without a full review, avoiding delay for a low risk transaction.

This includes acquisitions where:

• there is no risk of consumer harm or need for further assessment by the ACCC;

• there is no need for third party inquiries;  

• the acquirer and target do not compete with each other and there are many alternative suppliers;

• the merger parties have very low market shares;

• there are no vertical or conglomerate issues (e.g. a supplier buying one of its distributors, or the acquirer and target operate in different or related industries); or

• the transaction does not involve complex or unusual circumstances.

Practical considerations for your transactions

The new reporting regime introduces more time and cost into a transaction. Some things to consider if the transaction needs approval include:

• Acquirers and sellers need to keep good records: The filing process needs lots of information. For example, a serial acquisition will require the details of all acquisitions in the last three years for each party.  

• Filing fees: Each application has a filing fee. The fees depend on the value of the transaction, and the detail of ACCC’s review.

• ACCC approval process: The process takes up to 30 business days for an initial review (Phase 1), and up to 90 business days if a more detailed review is required (Phase 2). If the ACCC does not identify any competition concerns in Phase 1, it will likely be approved in 15 business days.

• Earliest settlement date: Parties must wait a further 14 calendar days to complete the transaction after receiving ACCC approval.

• Settle in 12 months: Parties have up to 12 months to complete the transaction after receiving ACCC approval.  

• Penalty risk: The transaction cannot proceed if ACCC disallows it. Parties risk penalties of $50 million for corporations and $2.5 million for individuals if they proceed to settle without approval.

• The rules may change: From 1 April 2026, additional thresholds apply for the sale of assets. The government is likely to review and change how the rules apply as the regime continues to develop.