From 1 January 2026, a new mandatory and suspensory merger control regime (the Regime) under the Competition and Consumer Act 2010 (Cth) (the CC Act) will apply to significant asset transfers, acquisitions and mergers. Not-for-profits (NFP) and charities acquiring assets or taking over another entity may need to seek ACCC approval for the transaction if certain threshold requirements are met.
What is the Regime and why does it matter to NFPs and charities?
The Regime1 establishes a mandatory notification obligation from 1 January 2026 for certain ‘acquisitions’ that meet prescribed thresholds. These ‘acquisitions’ cannot be effected until the Australian Competition & Consumer Commission (ACCC) has granted approval. This requirement will also apply to merger agreements entered into before 1 January 2026 that are completed on or after that date.
Under s 50 of the CC Act, an ‘acquisition’ of shares2 or assets3 that would or is likely to substantially lessen competition in a market may be prohibited. The ACCC looks at factors such as market concentration, barriers to entry and whether the acquisition removes an effective competitor to determine whether the acquisition would substantially lessen competition.
When would an ‘acquisition’ by an NFP or charity need to be notified to the ACCC?
An acquisition that is connected with Australia (e.g. the target carries on business in Australia or holds assets used in an Australian business) must be notified if it meets certain financial thresholds set by Ministerial Determination4. These are based mainly on revenue and asset value. In summary, an ‘acquisition’ by an NFP or charity5 would need to be notified to the ACCC in the following circumstances:
- Large Entity or Group: Notification is required if the combined Australian revenue of the merging parties is $200 million or more, and one of the entities involved has Australian revenue of $50 million or more (or assets valued at $250 million or more).
- Very Large Group: Notification is required if the acquiring group’s Australian revenue is $500 million or more, and the target’s Australian revenue is $10 million or more.
- Serial Acquisitions: Smaller acquisitions made over a three-year period may also trigger notification if, considered together, they reach the above thresholds. A revenue threshold still applies to each acquisition of $2m. This three-year period could include acquisitions prior to 1 January 2026.
Even if the thresholds are met, notification may not be required in relation to:
- internal restructures within the same group of entities;
- acquisitions in the ordinary course of business (not involving land or patents); or
- acquisitions that do not result in a change in control.
Further, parties may apply to the ACCC for a notification waiver (available from 1 January 2026) which removes the obligation to notify. The ACCC has indicated it will provide further information about waivers later in 2025.
What are the options for an NFP or charity who is required to notify the ACCC?
Organisations that are planning to merge and are required to notify have three options:
- Before 31 December 2026: early voluntary notification under the new regime
Organisations can notify now as if the Regime is in force (the ACCC will assess the notification as if the Regime already applies);
- Before 31 December 2026: informal merger review under the old pre-2026 regime (may no longer be available)
If an organisation applies and the ACCC approves the merger before 31 December 2025, then the acquisition can proceed but must be completed within 12 months of approval. If the ACCC review is not completed by 31 December 2025, the informal merger review will be discontinued and the acquisition must be notified under the Regime. As the ACCC has advised that requests for informal review received after October 2025 may not be completed before 31 December 20256, there is a significant prospect that this option is already or will soon be unavailable.
- After 31 December 2025: notify under the Regime.
What is the notification and review process under the Regime?
Broadly, the Regime includes provision for:
- Pre-notification discussions with the ACCC. These early, confidential discussions are intended to help identify any competition concerns early. Early notification can be completed through the ACCC portal.
- Notification waiver. As noted above, parties may apply to the ACCC for a notification waiver (available from 1 January 2026) which removes the obligation to notify. The ACCC has indicated it will provide further information about waivers later in 2025.
- Formal ACCC notification. This will be either short form notification7 (for straightforward acquisitions that are less likely to raise competition concerns) or long form notification8 (for acquisitions raising greater competition risks or complexity). For all submissions, parties must provide information including: details on the business activities and financial information (e.g. revenue) of all parties; information defining the relevant market(s), key competitors, and customers; documentation regarding prior deals put into effect over the preceding three years (to enable assessment of serial acquisitions as discussed above); and if using the long form, any Board documents (including papers, presentations, and reports) that analyse the acquisition’s rationale, valuation, and competitive dynamics of the market.
- ACCC assessment. This is a staged process involving:
- initial assessment (Phase 1 – $56,800);
- where competition concerns are identified, potential further assessment (Phase 2 – $855,000 to $1,595,000); and
- where there is substantial lessening of competition and the application would otherwise be refused or approved with conditions, a consideration of net public benefit (Public Benefits Application – $401,000).
What are the consequences of non-compliance?
If a notifiable acquisition is completed without ACCC approval, the ACCC can void or stay the transaction. It would also be a contravention of the CC Act to:
- proceed with a stayed merger,
- fail to comply with conditions imposed by the ACCC on an acquisition approval; or
- provide the Commission with information that is false or misleading.
Penalties for non-compliance are significant, being the greatest of: $50 million; three times the value of the benefit gained (if the benefit is determinable); or 30% of the entity’s adjusted turnover during the breach period (if the benefit is not determinable).
What are practical action steps for NFP and charity boards contemplating a merger?
- Consider whether notification is required in relation to proposed acquisitions
- Seek early advice and consider engaging with the ACCC confidentially to ascertain if notification is likely to be required
- Budget for compliance including ACCC fees if the transaction will be notifiable
- Prepare supporting documentation early including beneficiary/participant impact assessments, competitor analysis, and transaction rationale
- Stay informed and monitor emerging ACNC guidance as the Regime is further developed
Conclusion
The Regime represents a significant regulatory shift for NFPs and large charities that are involved in large or regular merger transactions. Proactive engagement with the ACCC, early advice and strategic planning will position your NFP or charity to avoid surprises and ensure compliance with the Regime.
How we can help
Moores Charity and Not-for-Profit team can work alongside you to prepare your board, assess merger readiness and liaise with the ACCC to ensure your organisation is well positioned for Regime compliance.
Contact us
Please contact us for more detailed and tailored help.
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Disclaimer: This article provides general information only and is not intended to constitute legal advice. You should seek legal advice regarding the application of the law to you or your organisation.