By Jacqueline Monk, Special Counsel, and Laura Mullen, Lawyer

A key element of Treasury’s new merger reforms is to require mandatory reporting to the ACCC if a transaction meets certain criteria. So, which transactions will be captured and required to report? On Friday, Treasury released draft ‘notification thresholds’ for stakeholder consultation, summarised by Treasury as follows:

Treasury estimates that applying these thresholds should see around 300 to 500 annual notifications to the ACCC. Currently, it isn’t mandatory for businesses to notify the ACCC of a proposed merger. However, if a merger results in a substantial lessening of competition in a particular market then it may contravene competition law (and attract penalties).

Interestingly, Treasury has proposed using both a turnover metric and a transaction value metric citing Facebook’s acquisition of Instagram as an example of high transaction value merger but with no turnover.

Treasury indicates that the new regulations will provide further guidance on how turnover and transaction value will be calculated.

Treasury acknowledges that there is substantial uncertainty related to the setting of the thresholds given the limitations of the data sources used (ACCC historical public merger review data, Treasury’s Merger Database, Bloomberg, commercial property transaction data and Refinitiv).

To ensure serial acquisitions are captured, it is proposed that all acquisitions within the previous 3 years within the same product or service markets by the acquirer be aggregated for the purposes of assessing whether an acquisition meets the monetary turnover threshold. This would be the case regardless of whether those acquisitions were themselves individually notifiable.

Consultation on these thresholds is open until 20 September 2024. While they have yet to be passed, current expectation is that the new merger reforms will apply from 1 January 2026.