The Australian Competition and Consumer Commission (ACCC) is making significant strides toward implementing its new merger regime, with the release of draft merger assessment guidelines for public consultation. This marks an important milestone in the transition to a more transparent and streamlined merger assessment process, which will take effect from 1 January 2026. As part of its ongoing efforts to reduce uncertainty and refine its approach, the ACCC is inviting feedback from businesses, advisers, consumers, and other stakeholders until 17 April 2025.

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Background on the Merger Reform

The draft guidelines are part of the Treasury Laws Amendment (Mergers and Acquisitions Reform) Act 2024, which was passed by the Australian Parliament in December 2024. The new law mandates a mandatory regime that requires all acquisitions of assets or a controlling interest of shares, unit trusts or managed investment schemes above certain prescribed monetary thresholds to be notified to the ACCC and prohibits those acquisitions from being implemented until the ACCC has given clearance.

This is a significant shift from the existing merger review process which is comprised of a voluntary informal review process and a formal public process of merger authorisation. This reform is designed to enhance the ACCC's ability to evaluate mergers and acquisitions with a clearer and more robust framework that prioritises consumer welfare and market competition, and brings Australia in line with most other jurisdictions, which typically have mandatory regimes.

Additional information on the merger reform, including the proposed thresholds, are available here.

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What Are the New Merger Assessment Guidelines?

The draft merger assessment guidelines released by the ACCC outline the framework it will use to assess acquisitions that are notified to ACCC under the new regime. These guidelines reflect the latest best practices in competition assessments and provide a clear and transparent roadmap for businesses navigating the merger notification and clearance process. While the new regime will not be mandatory until 2026, these draft guidelines offer valuable insight into the direction of merger regulation in Australia.

Dr Philip Williams, ACCC Commissioner, highlighted that the guidelines aim to help the community, merger parties, their advisers, and other stakeholders, understand how acquisitions will be assessed under the new regime. The draft guidelines are designed to provide greater predictability, enabling businesses and their legal advisers to anticipate the ACCC’s approach to merger decisions.

"The merger assessment guidelines are intended to help the community, including merger parties and their advisers, understand how the ACCC will assess acquisitions under the new regime," said Dr Williams.

In addition to improving understanding of the ACCC's decision-making process, the guidelines also highlight the enhanced transparency that will accompany the new regime. Decisions made by the ACCC will be more publicly available, with detailed reasoning behind each decision, making it easier for businesses and the public to follow the agency’s rationale and approach.

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Key Changes in the Merger Regime

While the legal test for assessing mergers, “substantial lessening of competition”, remains unchanged, there are important updates under the new regime:

• Market Power Considerations: The updated legislation clarifies that the test for “substantial lessening of competition” now also includes situations where a merger would create, strengthen, or entrench a substantial degree of market power. This change reinforces the economic link between reduced competition and increased market power, a concept already recognised in Australian jurisprudence.
• Cumulative Effect of Serial Acquisitions: A significant shift in the new guidelines is the ability of the ACCC to consider the cumulative impact of multiple acquisitions over a three-year period. This is particularly relevant for serial acquisitions—smaller, incremental acquisitions that, when combined, could substantially harm competition in a market. The ACCC will now take a broader, long-term view of market dynamics, which could influence whether an acquisition is approved.

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What Does This Mean for Businesses?

The new guidelines provide businesses with an opportunity to understand how their transactions will be assessed under the updated regime if they meet the prescribed thresholds and are required to be notified to ACCC. The draft guidelines address key concerns such as the treatment of serial acquisitions, which could have serious implications for businesses engaged in multiple, smaller mergers over time. For example, businesses may now need to consider the cumulative effects of their acquisitions more carefully, as the ACCC will be scrutinising patterns that could pose a threat to competition in the long term.

The guidelines also make it clear that businesses will need to demonstrate how their proposed mergers will not harm competition or lead to a substantial increase in market power. Given the growing emphasis on market power, businesses may need to provide more in-depth analyses of their market impact during the merger review process.

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A Transparent and Predictable Future

One of the most notable aspects of the draft guidelines is the ACCC’s commitment to greater transparency. In the past, merger assessments could sometimes seem opaque to businesses and the public. Under the new regime, the ACCC will provide more comprehensive explanations for its decisions, helping businesses better understand why certain mergers are cleared or blocked.

As Dr Williams pointed out, this will “provide greater predictability regarding the ACCC’s analysis and decision-making,” making it easier for businesses to plan and strategise their M&A activities within a more predictable regulatory framework.

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Next Steps and Consultation Process

The draft guidelines are now open for public consultation until 17 April 2025. The ACCC is encouraging feedback from businesses, advisers, consumers, and any other interested parties. After the consultation period, the guidelines will be updated and finalised ahead of the voluntary notification process, which begins on 1 July 2025.

The ACCC is also set to release merger process guidelines by the end of March 2025, which will further assist businesses in navigating the new merger control process.

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What’s Next?

As the transition to the new merger regime progresses, businesses and advisers should carefully review the draft merger assessment guidelines and consider submitting their feedback. The updated guidelines, once finalised, will provide greater clarity on how mergers will be assessed under the new regime, enabling businesses to plan their acquisitions with more certainty.

From 1 July 2025 a transition period will commence. During this period, businesses can continue to seek informal merger clearance or start using the new regime on a voluntary basis until the mandatory requirements come into effect on 1 January 2026. Merger parties should carefully consider the likely completion timetable for any potential acquisitions started in this window, which meet the thresholds under the new regime.

For ongoing updates on merger reform, interested parties can subscribe to updates on the ACCC’s website.

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Further Thoughts

The ACCC’s release of draft merger assessment guidelines is a significant step forward in the implementation of Australia’s new merger regime. By focusing on transparency, predictability, and an updated approach to market power, the guidelines provide businesses with a clearer understanding of how their mergers will be evaluated. As the consultation period progresses, the ACCC is poised to refine and finalise the guidelines, helping businesses prepare for the full transition in 2026.

If you are considering a merger or acquisition and would like to discuss how these reforms might impact your plans, please contact us. We would be happy to help you prepare and ensure a smooth transaction under the new regime.