The Australian Government has introduced a major legislative package on Thursday, aimed at overhauling the country's merger rules and marking the most significant reform in nearly 50 years.
The Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill 2024 seeks to enhance competition and productivity by streamlining the approval process for pro-competitive mergers while tightening scrutiny on those that may harm competition.
The bill introduces a mandatory notification system for mergers exceeding certain thresholds, with the Australian Competition and Consumer Commission (ACCC) as the central decision-maker. Key thresholds include:
- Mergers involving businesses with a combined Australian turnover exceeding $200 million, where the acquired entity has a turnover above $50 million or the global transaction value surpasses $250 million.
- Mergers involving very large businesses (turnover above $500 million) acquiring smaller businesses (turnover above $10 million).
- Serial acquisitions by businesses with combined turnover exceeding $200 million, where cumulative acquisitions in related markets over three years total at least $50 million.
These thresholds aim to allow the ACCC to concentrate its efforts on high-risk mergers while ensuring the swift approval of beneficial mergers. The thresholds will undergo a review 12 months after implementation to ensure effectiveness.
Land acquisitions for residential development and some commercial property acquisitions are excluded to avoid overburdening the system. However, the bill allows the Treasurer to adjust thresholds for high-risk sectors, such as supermarkets, where the ACCC will review all mergers to ensure fair competition and pricing for consumers.
The reforms are part of the Albanese Government’s broader strategy to reduce living costs and build a more competitive economy. The changes, set to take effect from 1 January 2026, will boost consumer choice and ensure fairer pricing across sectors. The bill also builds on previous reforms, including abolishing tariffs and enhancing supermarket sector competition.
Speaking at a press conference earlier today, Treasurer Jim Chalmers underscored the necessity for greater oversight in Australia's merger regulations.
"Too many potentially damaging mergers are slipping through the cracks," Chalmers said. "Unfortunately, the existing regime is both slow and insufficiently comprehensive, which is why we need these important changes. We want to address both of those issues."
The proposed reforms, aimed at enhancing competition and tightening regulatory processes, are set to take effect on January 1, 2026, pending parliamentary approval.
The Guardian Australia reported The Greens' Nick McKim as saying: "Labor has missed the chance to take the bold action needed: create the power to break up duopolies and oligopolies through forced divestiture.
"Big corporations already hold too much power, and simply trying to prevent them from getting bigger won’t fix the problem. What we need is to create competition by breaking up corporations when they misuse their market power.”
McKim added there needs to be the power to be able to “force the divestiture of corporations that have monopolised industries, including supermarkets, airlines and energy companies.
“Without these powers, we’ll continue to see price gouging, rising costs of living, and Australians paying the price for unchecked corporate greed.”