Navigating the ACCC’s new merger regime: Implications for Australian Property Transactions

Australia is overhauling its merger laws, aiming to ensure that market consolidation doesn’t come at the expense of competition.

The new mandatory merger control regime, set to commence on 1 January 2026.

The regime introduces a mandatory notification requirement for acquisitions of Australian real estate that meet specific monetary or control thresholds, necessitating prior approval from the Australian Competition and Consumer Commission (ACCC) before completion.

This development signifies a substantial shift in how large property transactions will be regulated in Australia.

What property transactions will require ACCC clearance?

Acquisitions resulting in larger corporate groups

ACCC clearance will be required if the following apply:

• The land to be acquired is connected with Australia;

and

• The combined Australian revenue of the acquiring entity (including connected entities) and that attributable to the land is at least $200 million;

and either

• The Australian revenue attributable to the land on the contract date is at least $50 million;

or

• The transaction value or the market value of the land is at least $200 million on the contract date.

Acquisitions by very large corporate groups

ACCC clearance will be required if the following apply:

• The land to be acquired is connected with Australia;

and

• The Australian revenue of the acquirer (including connected entities) is at least $500 million on the contract date;

and

• The Australian revenue of the land is at least $10 million on the contract date.

Creeping or second acquisitions

There are 2 scenarios here.

First

• The land to be acquired is connected to Australia;

and

• The combined Australian revenue of the acquirer (and connected entities) and the land is at least $200 million on the contract date;

and

• The cumulative Australian revenue from the acquisitions for the acquirer (including connected entities) involving predominantly the same or substitutable property over a 3 year period is at least $500 million;

and

• The Australian revenue attributable to the land to be acquired is more than $2 million on the contract date.

Second

• The land to be acquired is connected to Australia;

and

• The Australian revenue of the acquirer (including connected entities) is at least $500 million on the contract date;

and

• The cumulative Australian revenue from the acquisitions by the acquirer (including connected entities) involving predominantly the same or substitutable property over a 3-year period is at least $10 million;

and

• The Australian revenue attributable to the land to be acquired is more than $2 million on the contract date.

Targeted thresholds

This scenario applies in the following circumstances:

• The acquisition of a supermarket business by a major supermarket (Coles and Woolworths and their connected entities).

• Acquisitions of shares or assets (including land) by a major supermarket which results in the acquisition of an interest in land that meets the following criteria:

•  land with a commercial building on it and the gross lettable area of the building is in excess of 1,000m²;

or

• land without a commercial building on it which has a land area in excess of 2,000m2.

(and it is not an extension or renewal of a lease for land upon or where the acquisition of an equitable interest in the land has previously been notified to the ACCC)

Exemptions

Certain acquisitions have been expressly excluded from the new reporting requirements, including:

• land acquisitions made for the purpose of developing residential premises;

• certain commercial acquisitions when undertaken for a purpose other than operating a commercial business on the land; and

• extensions or renewals of a lease for land on which a commercial business is operated.

Legal tests

Merger competition test

The ACCC will determine that an acquisition should not be put into effect if it is satisfied that the acquisition would or would be likely to “substantially lessen competition”.

The ACCC may find an acquisition to be likely to substantially lessen competition where the acquisition would have the effect of creating, strengthening, or entrenching a substantial degree of power in the market.

Substantial benefits test

In order for the ACCC to consider whether to allow an acquisition on the grounds of a “substantial benefits test”, it must be satisfied that, were the acquisition put into effect, it would or would be likely to result in a benefit to the public and the benefit would outweigh the detriment to the public that would or would likely result from the acquisition.

Review process

The ACCC has made clear that it encourages engagement with the pre-notification process where potential issues can be raised prior to formal lodgement.

After lodgement, a phase 1 “initial review” will occur. The ACCC will make a decision within 30 business days (but not less than 15 business days). If the determination is made without issue, the transaction can be put into effect.

If the ACCC raises competition concerns, a phase 2 “in depth review” will occur, and a decision will be reached on that review within a further 90 business days.

If the ACCC makes a phase 2 decision to oppose, a party still may make a public benefit application within 21 days of the rejection.  The ACCC will make a determination on this application within a further 50 business days.

Meanings of terms

Disclaimer

The information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.