Which types of real asset transactions are caught?
Notifiable assets
The new merger regime applies to an acquisition by a corporation of any assets of a person where certain thresholds are met. With respect to real assets in particular, the definition of assets captures a broad range of legal and equitable rights in assets including:
acquisitions of interest in land, including leases and licenses
plant and equipment.
Exemptions
Key exemptions that may apply to real asset transactions include:
Acquisitions in the ordinary course of business (except patents) – for example commonly occurring property transactions such as the standard acquisition or renewal of a lease for business premises (except for certain supermarkets where special obligations apply) or acquisition of inventory.
Residential property or commercial property by a business primarily engaged in buying, selling or leasing land. This exemption is intended to cover property development activity.
Progressive acquisitions of interests in land or certain quasi-land rights where a notification waiver was obtained from the ACCC, subsequent acquisitions of the same interests in land.
Land development rights.
Exemptions relating to leases:
A lease that is entered into and commences before 1 January 2026.
Lease extensions and renewals, sale and leaseback arrangements.
Once an agreement to lease is notified (and it is approved), there is no need to separately notify the lease provided that there is no material change in the size of the leasehold or the parties. However, there is a 12-month time limit for an ACCC clearance if the transaction is not completed or unconditional. This could raise concerns for agreement for leases that have conditions around development approvals or construction.
There is no exception for land acquired at auction and so companies acquiring at auctions may need to include an ACCC condition (this is an issue that may be addressed next year).
These exemptions are in some cases complex and parties must ensure that their transaction falls within their precise terms.
Notification thresholds
For asset acquisitions, the notification thresholds depend upon whether the assets form all or substantially all assets of a business and the size of the acquirer. Please see our briefing here for a detailed outline of the notification thresholds.
Key things to keep in mind for real asset transactions
Review all real asset transactions to check whether they are notifiable: The mandatory notification regime will apply to a wider range of real asset transactions compared to the current regime. Given the severe consequences of not notifying (the transaction is automatically void) – ensure all real asset transactions are reviewed by a legal team before going ahead.
All transactions now need an ACCC condition: We can help you find the right clearance process for your deal or develop standard wording if you regularly engage in real asset transactions which may be notifiable.
Check any restraints: The ACCC has a new power to disallow non-competes in sale agreements including restrictive covenants in leases, so get these checked before filing.
Allow time for the ACCC: Even a straightforward deal should allow at least 6-8 weeks for ACCC clearance.Filing also needs to wait until after a deal has been done (that is, you cannot approach the ACCC until both parties intend to complete the transaction).
Be careful not to ‘gun jump’: The transaction cannot be implemented in any form until after the ACCC clearance process is completed. This means being extra careful about any pre-completion integration activities.
Australia’s new merger reforms have commenced and mark the most significant overhaul of Australia’s merger control framework in decades.