Australia's Incoming Mandatory and Suspensory Merger Regime: A Ready Reckoner and Flowchart

• Published date: 02 September 2025
• Law Firm: K&L Gates LLP
• Author: Ayman Guirguis,James Gray,Tess Kane,Jenna Yim

From 1 January 2026, significant reforms to Australia's merger clearance regime will come

into effect. The amended regime will operate on a mandatory and suspensory basis.

Parties must notify the Australian Competition and Consumer Commission (ACCC) of any

acquisition of shares or assets that satisfies the monetary and "control" thresholds set out

below, provided that the target carries on business in Australia. Acquirers can voluntarily

make notifications under the new regime from now.

Source: K&L Gates, 2025

Note: Serial or creeping acquisitions do not need to be reported if the target's Australian

revenue is less than AU$2 million.

Australia's Incoming Mandatory and Suspensory Merger

Regime: A Ready Reckoner and Flowchart

By: Ayman Guirguis, James Gray, Tess Kane, Jenna Yim

What Is Control?

Transactions must be notified to the ACCC if

the acquirer gains "control" over the target, and

if the monetary thresholds displayed left are

met. Control will be assessed according to the

test in section 50AA of the Corporations Act

2001 (Cth). The acquirer will have control over

the target if it has the capacity to determine the

outcome of decisions about the second entity's

financial and operating policies.

Acquisitions do not need to be notified if the

acquirer had control of the target immediately

prior to completion of the acquisition.

Notification is not required for acquisitions of

shares in a Chapter 6 entity if the acquirer will

hold less than 20% of voting rights post-

completion.

What Is a Connected Entity?

One entity is a ‘connected entity’ of another if:

(i) it is a subsidiary, holding company or a

related body corporate, (ii) it and one or more

of its associates controls or is controlled by the

other entity, or (iii) if both entities are under the

common control of another entity.

How Is Australian Revenue Calculated?

Australian revenue refers to the relevant

entity’s gross revenue, determined in

accordance with accounting standards, for the

entity’s most recently ended 12-month financial

reporting period, which is attributable to

transactions or assets within Australia, or

transactions into Australia.

How Is the Revenue of an Asset Calculated?

Where the acquisition is of an asset, the

relevant consideration for the purposes of the

monetary threshold will be the Australian

revenue that is attributable to the asset.

If it is not reasonably practicable to attribute

the Australian revenue of a target to a

particular asset, the relevant amount will

instead be 20% of the market value of the

asset.

Exceptions to the Mandatory Notification

Requirements

▪Certain Land Acquisitions

Acquisitions of land for the purpose of developing

residential premises (or operating a land

development or management business), lease

extensions and renewals, equitable interests in land

in the form of land development rights, and sale and

leaseback arrangements.

▪Liquidation, Administration, Receivership, etc

Acquisitions by a person in their capacity as an

administrative, receiver or liquidator.

▪Financial Market Infrastructure

Including transactions that arise in the ordinary

course of clearing and settlement activities, and

acquisitions of shares or assets that occur under a

contract as a result of the exercise of a right to close

out a transaction, or otherwise set off or combine

accounts.

▪Financial Securities

Acquisitions relating to the capital-raising process,

e.g., acquisitions resulting from rights issues,

dividend reinvestment or share bonus plans,

underwriting of fundraising, buy-backs and

derivatives.

▪Debt Instruments, Money Lending, etc

Acquisitions of debt instruments, asset

securitisation arrangements, debt interests,

securities financial transactions, security interests,

etc — provided that the acquisition does not lead to

"control" or the acquisition of all, or substantially all,

of the assets of a business.

▪Nominees and Other Trustees

Acquisitions of interests in securities by a person

acting as a bare trustee for a beneficiary, where the

beneficiary has a relevant interest in the securities

arising from a presently enforceable and

unconditional right to acquire them. Acquisitions

made by a provider for custodial or depository

services in the ordinary course of providing that

service are also exempt (see section 766E of the

Corporations Act 2001 (Cth)).

▪Acquisitions Occurring by Operation of Law

This exemption refers to acquisitions which happen

automatically based on principles set out in a state-

based or Commonwealth law, without any specific

action or agreement by the parties involved. Parties

have no discretion as to whether or how the

acquisition occurs.

The Monetary Thresholds