On 30 August 2024, the Treasury released a consultation paper outlining the much anticipated proposed merger notification thresholds which form part of the Australian Government’s proposed merger overhaul (announced earlier this year and covered in our previous alert).¹ The consultation paper is currently open to public submissions until 20 September 2024. 

Under the proposed new mandatory and suspensory administrative merger system, notification thresholds will be used to determine which mergers or acquisitions must be notified to the Australian Competition and Consumer Commission (Commission) for assessment. 

In this alert we provide a summary of the monetary and market concentration thresholds and additional targeted notification requirements which the Commission proposes to use to assess those mergers most likely to harm competition and impact Australian consumers.

Proposed monetary thresholds

An acquisition will be notifiable if the target business or asset has a material connection to Australia, and at least one of the two limbs below relating to monetary thresholds are satisfied. It is noted that all acquisitions within the previous three years with the same product or service market(s) (not dependent on geographic location) by the acquirer (and acquirer corporate group) will be aggregated when the Commission assesses the monetary threshold value, irrespective of whether the individual acquisitions were notifiable. 

Limb 1

(a) The combined Australian turnover of merger parties (including the acquirer group) is at least AU$200 million; and

(b) Either:

(i) at least two of the merger parties have an Australian turnover of at least AU$40 million; or

(ii) the global transaction value is at least AU$200 million.

Limb 2

(a) The acquirer group Australian turnover is at least AU$500 million; and

(b) Either:

(i) at least two of the merger parties have an Australian turnover of at least AU$10 million; or

(ii) the global transaction value is at least AU$50 million.

Proposed market concentration thresholds

An acquisition will be notifiable if the target business or asset has a material connection to Australia, and at least one of the two limbs below relating to market concentration thresholds are satisfied.

Limb 1

(a) The combined share of an affected market of the merger parties is at least 25 per cent; and

(b) At least two of the merger parties (including acquirer group) have an Australian turnover of at least AU$20 million. 

Limb 2

(a) The combined share of an affected market of the merger parties is at least 50 per cent; and

(b) At least two of the merger parties (including acquirer group) have an Australian turnover of at least AU$10 million. 

Additional targeted notification requirements

Additional targeted notification requirements may be imposed on merger parties by Ministerial determination if there are evidence-based concerns regarding high-risk acquisitions in certain markets.

The provisions of the proposed reforms allow such determination by reference to, or partly reference to criteria which do not amount to either a financial threshold or market share, but can include, for example, a ‘business, or class of businesses’: section 51BH of the proposed legislation.

The consultation paper identifies that in Australia, the grocery, fuel, liquor and oncology-radiology sectors are examples of high-risk sectors where potential competition issues may arise. 

1. The Treasury, Merger Notification Thresholds (Government Response, 30 August 2024).