Merger reform update: 'targeted refinements' take the sharpest edges off Australia's new merger regime

Proposed amendments to Australia's mandatory merger control regime seek to address some of the most problematic features of the new regime, which have resulted in highly conservative approaches to notifiability and contributed to a substantial over-capture of unproblematic deals in the first six months of its operation. While the changes will not affect the monetary thresholds for notification, they mitigate the consequences of missed notifications. 

On 2 July 2026, the Australian Government introduced what it describes as 'targeted refinements' to the merger control provisions of the Competition and Consumer Act 2010 (Cth) (CCA), tucked away in a schedule to the Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026 (Bill). Introduced with the stated aim of reducing regulatory burden while preserving the regime's integrity, the key changes are to: 

• replace the automatic voiding of acquisitions that are required to be notified but complete without notification with a Court-supervised 'voidable' model;
   
• clarify the 'control' exemption and narrow the definition of 'associate', reducing the capture of benign minority acquisitions and bringing Australia closer to the European ‘joint control’ model; and
   
• allow parties to seek extensions of Australian Competition and Consumer Commission (ACCC) approvals before they become 'stale' at the 12-month mark.

Moving from automatically void to 'voidable'

Failure to notify becomes ‘voidable’

Under current law, a non-notified acquisition that is put into effect is automatically void from the outset by operation of law, regardless of whether the failure to notify was deliberate or inadvertent and regardless of whether there are any substantive anticompetitive effects. The explanatory memorandum acknowledges that this "may have widespread unintended consequences in relation to non-notified acquisitions". 

For cross-border deals, it has meant the validity of a global transaction (at least as a matter of Australian law) could turn on a contestable Australian notifiability analysis, often where the Australian nexus was tenuous, sparking a wave of 'just in case' filings.

Under the Bill:

• the Federal Court must, on application by the ACCC, declare a non-notified acquisition that has been put into effect void unless the Court believes it is undesirable to do so, for example where voiding would cause significant harm to innocent third parties or the vendor has since been wound up;
   
• the Court may make other orders on the ACCC's application, such as requiring divestiture, and any affected party may apply for orders dealing with the consequences of a voiding order (for example, employee arrangements);
   
• applications must be made within six years of the acquisition being put into effect; and
   
• the Court may grant injunctions while the ACCC investigates or pursues a voiding application, including to pause integration, preserve target assets and prevent on-sale – with no undertaking as to damages required.

In deciding whether to void a non-notified acquisition, the Court must not have regard to whether the acquisition would substantially lessen competition or produce public benefits. This is designed to preserve the ACCC as the first-instance decision-maker and prevent parties from skipping notification to have the Federal Court run the competition assessment instead.

These changes will not be retrospective. Acquisitions already void remain void, although parties will retain the ability to make applications to deal with the consequences of the automatic voiding of those acquisitions.

Automatic voiding survives for gun-jumping and post-block completions

Significant deterrents against failing to notify remain. Completing non-notified acquisitions can still attract substantial civil penalties. Automatic voiding also survives in three scenarios: completing while a notification is still under review (‘gun-jumping’), after the ACCC has blocked the deal, or on a ‘stale’ clearance. 

Practical consequences

The practical effect of the proposed changes is that the worst-case consequence of an incorrect or overly aggressive decision not to notify shifts from the invalidity of the transaction itself to penalties and remedies exposure under Court supervision – a more conventional and predictable risk that can be priced, allocated and managed. The incentive to resolve borderline questions conservatively softens but does not disappear: voiding remains the default order once the ACCC applies to the Court and the retained automatic-voiding triggers (particularly completing on a stale approval) remain traps for the unwary. 

The Court supervision of the voiding process, and its ability to make related orders (e.g. requiring divestiture), also provides a process for sorting through the consequences of transaction voiding. This model is preferable to the current position of parties being left in a legal limbo in which it is unclear whether a completed transaction was in fact notifiable and is therefore void, and the consequences of that status. This change would also improve the position of third parties who deal with shares or assets the acquisition of which was not previously notified to the ACCC. While counterparties, financiers and employees are currently exposed to the consequences of a transaction’s invalidity that they have no means to detect, under the proposed changes, the Court-supervised model enables that fallout to be managed through tailored orders rather than a blanket unwinding. 

A joint control test that focuses on practical influence and seeks to limit unintended consequences 

Acquisitions of shares that do not afford an acquirer the ability, either on its own or jointly with its associates, 'control' of the target are generally exempt from notification (subject to the parallel application of voting power thresholds). Currently, the merger rules import and modify the Corporations Act 2001 (Cth) Chapter 6 definition of ‘associate’ designed for takeovers, which captures a range of competitively benign relationships such as co-investors. In light of the consequences of non-notification, some parties conservatively interpreted this definition as broad enough to treat co-investors as associates simply because they are parties to a shareholders’ agreement. 

The Bill restructures the joint control analysis into two distinct limbs, the first looking at the rights a party and their associates can enforce, and the second considering their practical influence:

1. Are other persons associates of an acquirer? A narrower definition of ‘associate’ will cover (i) members of the same corporate group, (ii) agreements with another person for the purpose of controlling or influencing the outcome of decisions about the target’s financial and operating policies (but will no longer extend to ‘board composition’), and (iii) persons acting in concert in relation to those matters.
   
   There are also important carve-outs, which provide that persons such as co-investors, joint acquirers, and/or minority investors will not be associates merely because they have entered into a relevant agreement that affords them one or more of the following rights (whether they are presently enforceable or conditional):
    
   • arms-length standard shareholder agreements about governance processes, such as those relating to board composition, pre-emptive rights, drag along and tag along rights, and restraints of trade for persons with management responsibility, as distinct from agreeing how shareholders will exercise their individual rights;
      
   • minority shareholder protection rights, covering rights consistent with protecting a financial interest as an investor, such as protections relating to changes to the constitution or capital, liquidation or winding up, related-party dealings, information access, board observer rights and, to the extent consistent with those requirements, board representation;
      
   • arms-length financing arrangements;
      
   • dividend policy arrangements;
      
   • rights to dispose of securities (or to control or exercise such a power); or
      
   • other classes of rights determined by the Minister.
      
2. If so, do they jointly have the capacity to control the target? The second limb is whether the acquirer and its associates jointly have the capacity to control the outcomes of decisions about the target’s financial and operating policies. The explanatory memorandum directs consideration to the ‘practical influence’ the acquirer and its associates can jointly exert in a ‘real and practical sense’, having regard to any practice or pattern of behaviour affecting the target’s financial and operating policies (even if it involves a breach of an agreement), and the nature of the relationship between the acquirer and its associates. 

The net effect of these proposed changes is that the concept of joint control would be appropriately limited to relationships capable of affecting a target’s strategic and potentially competitively significant behaviour. The result is a joint control test much closer to the international mainstream, bringing Australia broadly into line with the ‘decisive influence’ concept used in the EU and the ‘material influence’ approach used in the UK, and simplifying the Australian control analysis for overseas parties and their advisers.

This is a helpful amendment that would reduce precautionary filings for consortium bids, co-investments and strategic minority stakes, such as venture capital investments. However, it is important to note that the clarified exemption would not displace the separate voting power thresholds that commenced on 1 April 2026, such that minority acquisitions can remain notifiable on that basis (e.g. through an investor gaining over 20% voting power) even where there is no change in practical control.

Clearances get a longer shelf life

Currently, an acquisition must be completed within 12 months of receiving ACCC clearance, after which the notification becomes ‘stale’ – requiring the parties to seek a new clearance. That duration may not be suitable for complex multi-jurisdictional transactions, where the ACCC may grant clearance well before other regulators, before other complex conditions are satisfied, or where overseas clearances are otherwise delayed or litigated.

The Bill allows a notifying party to request extensions of up to six months at a time, with no limit on the number of extensions that can be granted. In assessing an extension request, the ACCC must consider: 

• whether there are reasonable reasons the deal has not completed;
   
• whether there have been material changes to the market since the clearance; and
   
• whether a fresh notification would be more appropriate. 

Conditions and remedies attaching to the original clearance would continue to apply, decisions to grant extensions would be published on the acquisitions register within one business day, and those decisions would be subject to judicial but not merits review. A party refused an extension can still re-notify. The mechanism is also available for clearances granted in the 12 months before its commencement, so recently cleared deals benefit immediately.

This is a pragmatic reform, and a far better path than re-running a full notification for a transaction whose substance and effect on competition has not changed. The primary open questions are how strictly the ACCC applies the 'material changes to the market' consideration in fast-moving sectors, and whether extension requests become, in practice, a narrow procedural check or a substantive re-examination of the clearance.

The Bill addresses consequences, not capture

The refinements are responsive to some of the more controversial procedural aspects of Australia’s merger control regime, but are directed at mitigating the consequences of the regime's conservatism rather than its reach. The explanatory memorandum frames the package as advancing a "risk-based merger control regime" that targets the transactions most likely to harm competition, a description that sits awkwardly with low monetary thresholds and a wafer-thin jurisdictional nexus that continue to capture deals with no plausible competitive effects. Those issues will no doubt be in focus in Treasury’s 12-month review of the regime.

Notification volumes will likely remain well above Treasury's expectation of 300-500 notifications annually, even as the associate clarifications remove one category of precautionary filings. Of the over 400 filings received in the first six months of the new regime, over 60% have been notification waivers (~95% of which have been granted). The fact that a clear majority of filings are pure process filings that raise no prospect of a material competition concern demonstrates the over-capture of the new regime, which we consider the Bill will not meaningfully mitigate.

Key implications 

These proposed changes will permit dealmakers and decision-makers to better calibrate the risks arising from Australian merger control assessments, and to conduct their analysis with respect to Australia more consistently with their approaches to other jurisdictions. Further, minority and consortium investments will gain a clearer control test that is more consistent with international comparators, and long-dated deals gain a workable path through the 12-month approval window.

None of this reduces the care required in assessing notifiability under the complex, over-engineered Australian regime. The notification obligation and suspensory effect are unchanged, penalties for completing without approval remain substantial, the new injunction pathway gives the ACCC a fast means of freezing a suspect deal, and automatic voiding survives for completions during review.