Biggest changes to M&A laws in Australia in 50 years — what it means for Ecommerce founders looking to exit

The Australian Government has announced the biggest reforms to M&A laws in 50 years, which will give the ACCC (our competition watchdog) more power to block deals. Here’s a rundown of what’s changing:

  • Mandatory notification: Deals above a certain threshold (TBC) will need to be notified to the ACCC. Under the current system, notifying the ACCC is voluntary and is usually only done if the parties want approval (formal or informal) before a deal is closed so they can avoid legal action after-the-fact.
  • ‘Creeping’ acquisitions will be scrutinised: All deals in the last 3 years, made by the acquirer and the target, will be considered by the ACCC when approving a deal. These previous transactions will also factor into whether a deal meets the notification threshold.
  • Onus of proof: Status quo for proof remains unchanged - for a deal to be blocked, the ACCC will need to prove that the deal will ‘substantially lessen competition’. However, the ACCC can now also consider whether the deal ‘creates, strengthens, or entrenches substantial market power in any market’, as part of the test. What this exactly means is also yet to be figured out.

These reforms are expected to become law in 2026, but will first go through a very extensive consultation process with lawyers, business groups, etc. to get the details ironed out. It’ll then need to be passed by parliament to come into effect. Australia’s only 1 of 3 developed countries who still have voluntary notification so this will bring us in line with the likes of the US.

What will this mean for Ecommerce founders?

We’re unsure what the ‘thresholds’ will be right now, but some expect it to be fairly low which means even smaller deals would need to be reported to the ACCC. The changes could also limit the ability for larger companies and their private equity owners to ‘bolt on’ smaller companies, as the ACCC will now look at all the acquisitions that have been made in the last 3 years, and be able to consider the overall dominance a company has in any market they play in before they approve a deal.

Under the new reforms, the ACCC will have 30 days (but can be fast-tracked to 15) to decide whether it has an issue with the deal otherwise it’s automatically approved. If they do see an issue, then they have another 90 days to conduct a proper review before reaching their decision. After that, the parties can seek a merits review from the Competition Tribunal if they don’t agree with the decision.

There’s still a lot to be worked out, but it means that there will probably be more international exits if the laws to sell to a local acquirer become more of a burden.

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