On 1 January 2026, Australia abandoned its decades-old, voluntary and largely informal merger clearance procedure and introduced a mandatory and suspensory merger regime.
For German entrepreneurs, this should be old news, as a similar system has existed in Germany since 1973, but at least since 1999, cf. Sections 35 et seq. GWB. However, the thresholds are much lower than in Germany and there are considerable procedural costs involved.So be careful, because the new rules in Australia can put local management in checkmate for weeks and also become really expensive – e.g. in the case of a purely German deal (AUD 250 million plus) where the target has a branch or subsidiary in Australia, or – e.g. if a target achieves annual sales of AUD 50 million in Australia. Violations are punishable by enormous penalties.
When must a notification be made?
Transactions that are subject to notification are those that (1) constitute an ‘acquisition’ of shares or assets, (2) are ‘connected with Australia’ (e.g. the target operates business in/to Australia), (3) exercise control within the meaning of Section 50AA of the Corporations Act, and (4) exceed at least one of the new monetary thresholds.
1. ‘Larger corporate groups’
- Combined Australian turnover ≥ AUD 200 million (EUR 120 million), and target revenue ≥ AUD 50 million (EUR 30 million); or
- global transaction value ≥ AUD 250 million (EUR 150 million), or
- ‘creeping acquisitions’ over the last 3 years ≥ AUD 50 million
2. ‘Very large acquirers’
- Acquirer group ≥ AUD 500 million Australian turnover (EUR 300 million), and
- Target turnover ≥ AUD 10 million, or
- Creeping acquisitions ≥ AUD 10 million.
The thresholds are reviewed at least every three years and may change before the start date.
How does the procedure work?
- The ACCC offers a pre-notification discussions– this is highly recommended, especially in view of the costs involved.
- Depending on the complexity and market issues, either a short-form or long-form notification is submitted.
- Phase 1 review: 15–30 business days and fees of AUD 56,800. Small businesses with a turnover of less than AUD 10 million can apply for an exemption. In Germany, this procedure is free of charge.
- Phase 2 review: up to 90 days + possible extensions and fees of at least AUD 475,000. In Germany, this procedure is free of charge.
- If the transaction is prohibited, either a public benefit authorisation or a merits review by the Australian Competition Tribunal is available.
- Clearances, after which a new notification must be submitted.
What is exempt?
Generous exemptions exist for internal restructuring, everyday business transactions (with exceptions for land rights and patents), certain financial transactions or acquisitions by insolvency practitioners or by court order.
Risks and side effects?
For once, don’t ask your doctor or pharmacist, but your solicitor.
Conclusion
Australia’s new merger clearance regime, which will come into force on 1 January 2026, is similar to the German system, so it is not a completely new concept for German companies. However, the thresholds are significantly lower, violations are severely penalised, and the proceedings – especially Phase 2 – can be expensive and time-consuming. Even shareholdings in Australian subsidiaries or turnover of AUD 50 million or more can trigger a notification requirement. Companies should therefore review, plan and seek legal advice at an early stage to avoid cost traps and delays.
The most important points in brief:
- Low thresholds & notification requirement: Even Australian sales of AUD 50 million or more or shareholdings in local subsidiaries may be subject to notifications requirements. Costs and effort: Procedures can be expensive (phase 2 from AUD 475,000) and lengthy; violations are severely penalised.
- Practical tip: Early planning, checking thresholds and seeking legal advice are crucial to avoid delays and cost traps.
