How the ACCC’s merger reforms sidestep the property problem

Back in April, the ACCC announced there would be reforms to merger rules coming in the near future. Now, those changes have been tabled before the Australian Parliament.

In a joint statement, Treasurer Jim Chalmers and Andrew Leigh MP, the Assistant Minister for Competition, Charities and Treasury and Assistant Minister for Employment, explained the need for pursuing updates to Australia’s merger rules.

“Most mergers have genuine economic benefits – allowing businesses to achieve greater economies of scale and scope, helping them to access new resources, technology and expertise. However, they can cause serious economic harm when firms are solely focused on squeezing out competitors to capture a larger percentage of the market,” the statement read.

The new merger control regime, which was tabled before Parliament on 10 October, was described by the Treasurer as “a major change for the ACCC, business and the Australian community”.

“Australia will move from a judicial enforcement model to a primarily administrative regime, with the ACCC as the first instance decision-maker on each notified acquisition,” he explained.

According to the Treasurer, the need for reforms had become increasingly clear, with Australia’s rules lacking the stringency of many of its international counterparts.

“Australia is one of only three OECD countries that doesn’t require compulsory notification of mergers. Last year, over 1,400 mergers were recorded, at a value of around $300 billion. Meanwhile, the ACCC looked at an average of 330 mergers a year over the past decade. But we don’t know whether these are the right 330, or the mergers with the greatest potential to cause harm.”

The changes outlined will be rolled out from 1 July 2025 on a voluntary basis, with it becoming mandatory from 1 January 2026.

Chalmers explained that only mergers above certain monetary thresholds will need to be notified to the ACCC and be approved before proceeding. The government intends to set these monetary thresholds in regulations following the passage of this bill.

The three thresholds are as follows:

1. Any merger will be looked at if the Australian turnover of the combined businesses is above $200 million and either the business or assets being acquired has Australian turnover above $50 million or global transaction value above $250 million.
2. The ACCC will look at any merger involving a very large business with Australian turnover more than $500 million buying a smaller business or assets with Australian turnover above $10 million.
3. To target serial acquisitions, all mergers by businesses with combined Australian turnover of more than $200 million, where the cumulative Australian turnover from acquisitions in the same or similar goods or services over a three‑year period is at least $50 million, will be captured, or $10 million if a very large business is involved.

Legislation welcomed by property professionals

Having reviewed the draft legislation, the property industry has breathed a sigh of relief that the new laws will not increase red tape on residential and commercial land deals.

Under the bill, land acquisitions involving residential property development and certain commercial property acquisitions will be exempted from the thresholds to avoid “clogging up the system with simple land purchases unless they are captured by additional targeted notification requirements”, according to the Treasurer.

The Property Council of Australia (PCA) applauded the Treasurer for making this “sensible decision”.

PCA chief executive Mike Zorbas noted that as originally proposed, the notification thresholds “would have captured thousands of capital-intensive property transactions that are clearly outside the policy intent of the reforms. As drafted, those thresholds would have harmed the residential market’s ability to price, finance and deliver new homes to rent and buy, pushing up house prices and the cost of creating essential new commercial property that supports economic activity in our cities”.

Noting that this is “detail still to come”, Zorbas expressed relief that “so far the government has listened to industry feedback and acted to address unintended consequences for the capital-intensive but low-risk property sector”.

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