This chapter is republished from Global Competition Review’s Merger Remedies Guide – Sixth Edition. For the original publication and related global analyses, visit Global Competition Review.
The acquisition of shares or assets in Australia that have the effect or likely effect of substantially lessening competition is prohibited under sections 50 and 50A of the Competition and Consumer Act 2010 (Cth) (CCA). Australia’s merger control regime is undergoing significant change, with a new mandatory and suspensory administrative regime commencing on 1 January 2026. From 1 January 2026, acquisitions that meet certain thresholds and other requirements must be notified to the Australian Competition and Consumer Commission (ACCC), or the transaction will be considered void and merger parties may be liable to pay significant penalties. This represents a significant departure from Australia’s outgoing voluntary, judicial enforcement model.
Under both the outgoing and new merger control regimes, the ACCC can accept court enforceable undertakings under section 87B of the CCA (87B Undertaking) as a means of remedying competition concerns that may arise from a merger. The ACCC has a demonstrated preference for structural remedies over behavioural remedies. For instance:
of the eight transactions approved by the ACCC subject to undertakings in 2024-2025, only two were subject to behavioural undertakings; and
of the three transactions approved by the ACCC subject to undertakings in 2023-2024, only one was subject to behavioural undertakings.
This chapter provides practical guidance for navigating complex merger review in Australia. After a brief overview of the new mandatory merger control regime, we discuss the types of remedies typically accepted by the ACCC and strategies for remedy negotiations. We then discuss how remedies are modified or enforced. Finally, we consider how the ACCC interacts and cooperates with other regulators, including in relation to multi-jurisdictional transactions.
Overview of the new merger control regime process
Australia’s merger regime will be mandatory and suspensory from 1 January 2026. This means notifiable transactions or acquisitions that fall within a specific targeted class of acquisitions must not close until they have been cleared by the ACCC or the Australian Competition Tribunal (Tribunal), or they will be considered legally void and expose the parties to substantial penalties.
The merger reforms reflect a significant change from the outgoing judicial enforcement model to an administrative model, under which ACCC determinations will be subject to limited merits review by the Tribunal, based primarily on material before the ACCC. When the new regime commences, parties will no longer have the ability to challenge the merits of an ACCC decision before the Federal Court and there will be no merger authorisation process.
Notifiable acquisitions
Under the new regime, parties need to notify the ACCC of an acquisition if it does not fall into an exemption, if target shares or assets are ‘connected with Australia’, the acquisition results in the acquirer obtaining ‘control’ over the target, and the acquisition would meet the following alternative monetary thresholds:
for acquisitions resulting in large or larger corporate groups:
the combined Australian revenue of the merger parties is $200 million or more (including connected entities) on the contract date; and
either the Australian revenue of the target (including connected entities) is $50 million or more, or the transaction value is $250 million or more (i.e., the greater of market value of the shares / assets or consideration under the sale agreement); or
for acquisitions by ‘very large’ corporate groups:
the acquirer has Australian revenue of $500 million or more (including connected entities) on the contract date; and
the target has Australian revenue of $10 million or more (including connected entities) on the contract date; or
for creeping or serial acquisitions:
the acquirer and target combined Australian revenue is $200 million or more (for medium to large sized mergers) or the acquirer has Australian revenue of $500 million or more (for ‘very large’ acquirers); and
the cumulative Australian revenue from acquisitions by the acquirer, including connected entities, over the past 3 years involving competitive goods or services is $50 million or more (for medium to large sized mergers) or $10 million (for ‘very large’ acquirers).
The Treasurer can also determine that a particular class of acquisitions must be notified, regardless of whether the notification thresholds have been met. To date, acquisitions of shares or assets involving major supermarkets acquisitions have been designated as classes of acquisitions requiring notification.
Notification waiver
From 1 January 2026, parties can voluntarily apply to the ACCC to make a determination to grant a waiver of the requirement to notify an acquisition.
At the time of writing, the Government had not yet released the criteria and form of waivers. However, the ACCC has indicated it intends for waivers to be an efficient process used where notifiable acquisitions are unlikely to meet the monetary thresholds or do not raise competition risks that need further investigation and that the waiver process is not intended as an alternative to notification where competition issues may warrant further assessment.
Non-notifiable acquisitions
Where a merger does not meet the statutory notification thresholds, parties can still voluntarily notify an acquisition to the ACCC. In making this decision, merger parties need to make a strategic call regarding the extent of any proactive engagement with the ACCC to mitigate the risk that a non-notifiable acquisition could still be prohibited under section 50 of the CCA if the merger would, or would be likely to have the effect, of substantially lessening competition in any market.
Considerations relating to transactions involving a Foreign Investment Review Board (FIRB) process are discussed later in this Chapter.
ACCC assessment process
Notifications to the ACCC are made by the ‘principle party’ to the acquisition (i.e. the acquirer or acquirers of the shares or assets) using the prescribed ‘short form’ or ‘long form’. The ACCC’s Interim Merger Process Guidelines (Interim Guidelines) indicate the short form is likely to be appropriate for straightforward acquisitions that are unlikely to raise competition concerns and the long form for acquisitions that may raise greater competition concerns and/or complexity. At a high level, the long form should be used when the transaction involves a horizontal, vertical or conglomerate acquisition, that either reaches certain combined market share thresholds or involves certain special circumstances (e.g. where the merger involves the acquisition of a vigorous and effective competitor).
The ACCC encourages parties in complex mergers to engage in pre-lodgement discussions with the ACCC on a confidential basis, including to identify what data and information should be produced. Parties are encouraged to initiate pre-notification engagement at least two weeks before they propose to formally notify the ACCC and to contact the ACCC ‘much earlier’ for acquisitions ‘where competition concerns may be identified or which are clearly more complex and may involve a remedy offer’.
Parties involved in competitive bidding scenarios should note that a bidder will not be able to notify a proposed acquisition to the ACCC until the vendor and a bidder reach the point where they either enter into, or intend to enter into, a contract, arrangement or understanding pursuant to which the proposed acquisition is to take place.
Under the new regime, the ACCC will continue to assess notified acquisitions by applying the ‘substantial lessening of competition’ test. This can include the following phases:
Phase 1 (initial review stage): All notified transactions will be considered in Phase 1. Where competition concerns are not identified in Phase 1, the ACCC may quickly determine that a notified acquisition can be put into effect, with or without conditions.
Phase 2: Where the ACCC is satisfied that the notified acquisition could have the effect or be likely to have the effect of substantially lessening competition, the ACCC will move the acquisition to an in-depth review under Phase 2. During Phase 2, the ACCC will issue a ‘notice of competition concerns’ to the notifying party, setting out the preliminary assessment of whether the transaction would be likely to substantially lessen competition in any market, and the grounds for that assessment. At the end of Phase 2 the ACCC must determine that a transaction can be put into effect, with or without conditions, unless it is satisfied that it would, if put into effect, have the effect or likely effect of substantially lessening competition in any market.
Public benefit phase: If the ACCC determines that the transaction must not be put into effect (at the end of Phase 2) or can only be put into effect subject to conditions (in Phases 1 or 2), parties can apply for ACCC approval if the acquisition may nonetheless result in a net public benefit. In this phase, a public benefit application is made to the ACCC for it to consider whether the transaction’s likely public benefits outweigh its public detriments. If the ACCC makes a ‘public benefit determination’ that the acquisition would be of public benefit, it may be put into effect (with or without conditions).
A notifying party or a third party that is dissatisfied with an ACCC determination may apply to the Tribunal for a limited merits review of the determination.
Filing fees
Merger notifications must be accompanied by the relevant fee (if any) before there can be an ‘effective notification date’. The filing fees for the new mandatory regime for 2025-26 are:
Notification waiver application: $8,300;
Phase 1: $56,800 to notify proposed acquisition;
Phase 2: If transaction value (being the greater of the market value or consideration receivables of all shares and assets being acquired) is:
$50 million or less: $475,000;
more than $50 million and less than or equal to $1 billion: $855,000; and
more than $1 billion: $1,595,000.
Public benefits application: $401,000.
The applicable fee for Phase 2 must be paid within 7 business days commencing from the day the ACCC advises notification is subject to Phase 2 review. If the notifying party does not pay the fee in time, the ACCC is taken to have ceased its assessment of the notified acquisition.
Statutory timeframes
Under the new merger regime, the ACCC is required to make a determination within:
30 business days of the ‘effective notification date’ for Phase 1;
90 business days for Phase 2; and
50 business days where the applicant makes a public benefits application.
The ACCC can extend these timeframes or ‘stop the clock’ in certain circumstances, including where merger parties offer a remedy during Phase 1 or Phase 2 within the legislative timeframes.
An application for Tribunal review must be lodged within 14 calendar days after the statement of the ACCC’s reasons for making its determination are included on the ACCC’s public acquisitions register. The Tribunal has 90 calendar days to complete the review but may extend this period in certain circumstances.
Changes to the ACCC’s assessment approach under the new regime
While the ACCC applies the substantial lessening of competition test under both the outgoing and new merger review regime, there have been some significant changes to the factors to be considered in this assessment under the new regime. These include:
A substantial lessening of competition may now result from the creating, strengthening or entrenching of a substantial market power.
In considering whether an acquisition, if put into effect, would or could substantially lessen competition, the ACCC can now treat the effect of the acquisition as being the combined effect of the acquisition and:
any prior acquisitions that were put in effect in the past 3 years;
which involve a party or related body corporate to the current acquisition; and
the targets of which are involved (directly or indirectly) in the supply or acquisition of the same or substitutable goods or services, or goods or services which are otherwise competitive with each other.
There is greater emphasis on economic analysis, including through the use of traditional economic tools to assess mergers, more detailed discussion on the different types of efficiencies and clarifying when efficiencies are relevant to the ACCC’s competition assessment of a merger.
Several novel concepts and theories of harm have been introduced, including consideration of multi-sided platforms, network effects, integration into ecosystems and limiting access to data and interoperability.
Merger remedies
Under both the outgoing and new merger control regimes, merger parties can offer commitments or undertakings to the ACCC to remedy potential competition concerns.
Section 87B of the CCA allows the ACCC to accept a court enforceable undertaking as a remedy for potential breaches of the CCA, including breaches of section 50 or 50A. 87B Undertakings are voluntary and the ACCC does not have the power to require merger parties to provide undertakings. However, under the new merger control regime, the ACCC can include conditions in a determination, which may impose a remedy. In these circumstances, the parties must comply with these conditions when proceeding with the acquisition, or they will be in breach of the CCA and exposed to substantial penalties.
The ACCC’s objective in accepting an 87B Undertaking is to resolve a potential competition concern.
In assessing a section 87B Undertaking, the ACCC’s approach to considering the appropriateness of a proposed remedy will depend on the facts, merits and circumstances of each matter. Factors the ACCC will consider include:
efficacy in dealing with competition concerns: the ACCC will consider whether the undertaking appropriately addresses its competition concerns. The ACCC will also take into account relevant practical matters, such as a consideration of the risks that the implementation of the undertaking poses and whether the level of risks involved are acceptable;
least burdensome remedy: the ACCC will test how difficult a remedy will be to administer;
achievability of undertaking: the ACCC will consider the ability of the parties to deliver the outcomes required by the undertaking;
cost of monitoring, enforcement and implementation: the ACCC considers the monitoring and compliance costs associated with an undertaking; and
impact on third parties: in addition to considering the effects of the merger and proposed undertakings in the relevant markets, the ACCC will consider whether third parties are affected (for example, an undertaking should not be inconsistent with existing contractual obligations between a merger party and a third party). Market inquiries are relevant to considering this issue.
Structural and behavioural 87B Undertakings
Like its counterparts in other jurisdictions, the ACCC allows merger parties to offer structural or behavioural undertakings (or both) to remedy competition concerns. However, the ACCC prefers structural undertakings over behavioural undertakings. The ACCC considers that structural remedies tend to be more straightforward to administer, monitor and enforce and that behavioural undertakings can be inflexible and unresponsive to market changes over time and also require monitoring for longer, which increases both compliance and monitoring costs.
Although the ACCC’s view is that behavioural undertakings will rarely be sufficient to address its competition concerns, it may accept a behavioural undertaking if structural remedies are not suitable. The ACCC has recently accepted behavioural undertakings in:
Qube/MIRRAT: In 2025, the ACCC accepted a section 87B Undertaking to remedy competition concerns in relation to Qube Holdings Limited’s (Qube) proposed acquisition of Melbourne International RoRo & Auto Terminal Pty Ltd (MIRRAT). The ACCC found that, without the undertaking, Qube would, through its ownership of MIRRAT, likely have the ability and incentive to discriminate against rival stevedores and pre-delivery inspection providers at Webb Dock West at the Port of Melbourne. The undertaking prevents Qube, its wholly owned subsidiary Australian Amalgamated Terminals Pty Ltd (AAT), and MIRRAT from discriminating against downstream rivals at Webb Dock West including by establishing a non-discriminatory open access regime for all users of the relevant terminals, to govern the management and operation of the terminals for the duration of the undertaking. The undertaking requires AAT and MIRRAT to:
provide certain price and non-price dispute resolution processes;
comply with berthing allocation rules;
ring-fence specified confidential information;
report on its compliance with the undertaking, which includes independent auditing; and
comply with restrictions relating to the introduction or variation of certain tariffs.
Sigma/Chemist Warehouse: In 2024, the ACCC confirmed it would not oppose the proposed merger of Sigma (a pharmaceutical wholesaler and franchisor of retail pharmacies) and Chemist Warehouse (a franchisor of retail pharmacies, which also operates as a wholesaler to its franchisees) following the acceptance of a section 87B Undertaking. The ACCC determined that, with the undertaking in place, the proposed merger is unlikely to substantially lessen competition nationally or locally because other pharmacies and non-pharmacy retailers would continue to compete to the same degree as prior to the merger. The accepted undertaking addressed the ACCC’s competition concerns for the merger by requiring Sigma to commit:
to ensure that Sigma franchisees and wholesale customers can readily terminate their agreements with Sigma, subject to certain exclusions;
to implement data protection measures and to delete confidential information when Sigma franchisees and wholesale customers elect to terminate their contracts with Sigma;
to remain a participating pharmaceutical wholesaler in the Commonwealth Government’s Community Service Obligation arrangements; and
to provide for the effective oversight of Sigma’s compliance with the undertaking.
Armaguard/Prosegur: In 2023, the ACCC accepted behavioural undertakings as a condition of granting authorisation to the proposed merger between Armaguard and Prosegur, the two largest suppliers of cash-in-transit services in Australia (comprising cash transport, management and processing services), predominantly provided to banks, retailers and independent ATM operators. While the ACCC was not satisfied that the proposed merger would not substantially lessen competition, it considered that the undertaking would increase the public benefits and reduce some of the public detriments likely to result from the merger, ensuring that the merger would be likely to result in a public benefit that would outweigh the likely public detriment. The ACCC accepted that without the merger, either of the parties were likely to rapidly exit the cash-in-transit market in the near future, leading to disruption in the availability of cash for customers and the broader public. The undertaking is effective for three years and includes commitments to:
limit the merged entity’s ability to increase prices and reduce service levels for new and existing customers;
continue servicing all locations currently serviced;
maintain a register of surplus personnel, equipment and sites available to third-party cash-in-transit providers; and
provide certain services to independent ATM operators and to third-party cash-in-transit providers.
Timeframes to propose a remedy under the new regime
Under the new regime, parties need to offer a commitment or undertaking to remedy competition concerns up to, and including:
business day 20 of Phase 1;
business day 60 of Phase 2; and
business day 35 of a public benefits application.
Parties should be proactive in considering when it would be appropriate to offer undertakings to the ACCC. For example, if timing is particularly critical and competition concerns are readily apparent, it may be appropriate to offer an undertaking at the same time as providing notification to the ACCC. The ACCC’s Interim Merger Process Guideline highlights that the ACCC expects parties proposing to offer a remedy to put their best proposal forward as early as possible and that parties ‘ensure it is complete to enable the ACCC to consider the substance of the offer and make a decision within the statutory timeframes’.
ACCC process for assessing proposed 87B Undertakings
The ACCC expects the parties to offer a commitment or undertaking via the ACCC’s acquisitions portal.
Once an 87B Undertaking is offered, the ACCC typically conducts public market inquiries (which can be targeted) with interested parties to test whether the proposed remedy is adequate to address competition concerns raised by the potential transaction and the level of composition, purchaser and asset deterioration risk associated with the proposed divestiture package. If there is feedback from interested parties, it is often raised with the merger parties and the ACCC might suggest amendments to the proposed 87B Undertaking to address any issues. The parties can offer revised versions of the commitment or undertaking where permitted under the statutory timelines.
If a merger is being considered in more than one jurisdiction, the ACCC will generally consult with the relevant overseas competition agencies, including in relation to remedies. As discussed below, the ACCC is a party to a series of cooperation agreements with other competition agencies and actively engages with its counterparts when assessing theories of harm and appropriate remedies in multi-jurisdictional mergers.
Power of the ACCC to include conditions
Under the new regime, the ACCC has a broad power to include conditions in a determination, in circumstances where, in the absence of the conditions, the acquisition could have the effect of substantially lessening competition. This power gives the ACCC the discretion to determine the appropriate remedy, rather than being confined to accepting or rejecting the commitments or undertakings offered by the parties. In deciding the appropriateness of a condition, the ACCC must have regard to all relevant matters, the effect of the proposed conditions on consumers, as well as any consumer benefits that may result from the conditions.
Where the ACCC is considering including conditions that have not been offered by the parties, it will engage with the parties, and where appropriate, any relevant third parties.
The following are examples of conditions that the ACCC may include:
a condition that the acquirer divest part of the business being acquired;
a condition that imposes the remedy offered by the parties; or
a condition that the parties give and comply with an 87B Undertaking.
Variation or withdrawal of accepted 87B Undertakings
A merger party may vary or withdraw an 87B Undertaking that has been accepted by the ACCC, but only with the ACCC’s consent. This will involve writing to the ACCC with the specific request to vary or withdraw the 87B Undertaking with reasons for the ACCC to consider. The reasons for the request could be that market circumstances have changed or that compliance with the 87B Undertaking is found to be too difficult or impractical.
When making a variation decision, the ACCC will consider whether the variation remains in alignment with the purpose of the original 87B Undertaking, along with other information available to it, including any market feedback on competition in the relevant markets.
A variation of an 87B Undertaking is made publicly available on the ACCC website. A decision to amend an 87B Undertaking is open to review by the court.
Waiver of 87B Undertaking obligations
The ACCC can also waive the need to comply with a section 87B Undertaking. Waiver decisions are made publicly available on the ACCC website.
Monitoring and enforcement of merger remedies
Where the ACCC approves an acquisition subject to a remedy (i.e., a condition and/or an 87B Undertaking), it will monitor whether these remedies are complied with.
The ACCC’s monitoring activity will vary depending on the condition and/or 87B Undertaking, but generally involves an ACCC-approved independent auditor and periodic reporting by the auditor. Recent examples include:
The April 2025 Qube/MIRRAT undertaking required an independent auditor to be appointed to monitor compliance with the open access and non-discrimination obligations. The undertaking requires Qube, AAT and MIRRAT to submit regular compliance reports, support independent audits, and promptly act on auditor recommendations and ACCC directions within set deadlines.
The November 2024 Sigma/Chemist Warehouse undertaking required an ACCC-approved auditor to deliver an initial audit report within 20 days of completion, with subsequent quarterly updates until all conditions were satisfied. Sigma was also obliged to act on auditor recommendations and ACCC instructions within 10 days.
The July 2024 Louis Dreyfus/LDC Enterprises Group undertaking required an approved independent auditor to be appointed to audit and report on compliance with the undertaking. The auditor was required to provide an audit report to the ACCC within 20 business days of completion, every month until the divestiture was completed or the relevant joint venture terminated, and following that, every three months until the ACCC was satisfied that the obligations in the undertaking were fulfilled.
Where a remedy is put into effect by a condition, the ACCC will investigate potential non-compliances with these conditions. Any instances of non-compliance with a condition will breach section 45AZ of the CCA and be subject to penalties, as well as enforcement under section 81B of the CCA, such as court orders including divestiture or a declaration that the acquisition is void.
If an independent auditor identifies a failure to comply with the obligations of an 87B Undertaking, it may cause the ACCC to commence court action to enforce the undertaking. In Toll Holdings Ltd v. ACCC, questions about Toll’s compliance with its undertaking were first raised in the independent auditor’s reports.
If the ACCC considers that the merger parties have breached an 87B Undertaking, it may make an application to the Federal Court seeking orders to enforce the undertaking. The Court has the power to make any orders it considers appropriate, which may include:
directing compliance with the 87B Undertaking;
directing that the Commonwealth be paid the amount of the financial benefit reasonably attributable to the breach; and
compensation for other parties who have suffered damage as a result of the breach.
The ACCC has sought, and will seek, to enforce 87B Undertakings in relation to mergers if a party has allegedly breached the undertaking, as illustrated by the following two examples:
In 2006, the ACCC accepted an 87B Undertaking by Alinta in relation to its acquisition of Australian Pipe Trust. The 87B Undertaking contained an obligation to structurally separate the merger parties’ interests in the Dampier to Bunbury Natural Gas Pipeline (DBNGP Holdings) and that no member of staff of Alinta be involved in commercial negotiations between the Pipeline and other shippers. The ACCC commenced proceedings when an Alinta employee was seconded to DBNGP Holdings. The parties agreed to settle. The court declared that Alinta had breached its undertaking and ordered Alinta to pay the ACCC’s costs of the proceedings, fixed at $250,000.
In Toll Holdings Ltd v. ACCC, the court found that Toll had breached its undertaking. Toll was obliged not to share management or employees with Asciano Limited. A Toll subsidiary entered into a labour hire contract with Asciano whereby casual employees of the Toll subsidiary would be instructed to supply labour to Asciano. On the interpretation of the undertaking, the court concluded that the arrangement would be in breach of the undertaking and ordered Toll to pay the ACCC’s costs.
A third party does not have the right to enforce an 87B Undertaking under the CCA, although a breach of an undertaking could be regarded as unlawful for the purposes of tort law.
In the cross-border merger context, the ACCC’s jurisdiction under the CCA is limited to whether the parties are either incorporated or carrying on a business in Australia, unless the parties voluntarily submit to the ACCC’s jurisdiction.
Cooperation with other regulators
Overseas competition agencies
If the ACCC considers a merger which is also being considered by competition agencies in other jurisdictions, the ACCC will generally consult with the relevant agencies. The ACCC is a party to a series of cooperation agreements with other competition agencies, and it actively engages with its counterparts when assessing theories of harm and appropriate remedies in multi-jurisdictional mergers. These cooperation agreements allow sharing of intelligence, case theories and investigative techniques:
The ACCC often coordinates with the New Zealand Commerce Commission (NZCC), with which it has a protocol in place for the review of trans-Tasman mergers. There is additionally a cross-appointment arrangement between the ACCC and NZCC that permits members of a regulator to have full access to all confidential information held by the other regulator.
The ACCC has cooperation arrangements with other foreign agencies, including the Competition Bureau of the Government of Canada, the UK’s CMA, the European Commission, the US Department of Justice (Antitrust Division), the US Federal Trade Commission, the Italian Competition Authority, the Competition Commission of India, the Fair Trade Commission of Japan, and the State Administration for Market Regulation of the People’s Republic of China.
The ACCC’s Interim Guidelines state that parties to an acquisition should inform the ACCC if a notified acquisition is subject to review in other jurisdictions.
In the context of a merger review, when a transaction is also being considered by international agencies, the ACCC may consult with these agencies to inform its own review – see for example, the ACCC’s cooperation with the UK’s CMA, the US Department of Justice, the European Commission and the NZCC on Cargotec’s proposed acquisition of Konecranes in 2022. If those discussions do not involve protected information, the ACCC can coordinate with other agencies without permission from the merger parties. However, if the ACCC wishes to exchange confidential information with international agencies, it will generally seek a confidentiality waiver from relevant parties. The confidentiality waiver must be provided in a form acceptable to the ACCC.
FIRB
Some transactions involving foreign ownership require approval by the FIRB. Although the FIRB process is formally separate from the ACCC’s review process, one of the matters the FIRB take into account in assessing whether a notifiable transaction is contrary to the national interest is whether the transaction would have an adverse effect on competition in Australia.
Merger parties that apply to the FIRB for approval need to indicate whether the acquisition will be notified to the ACCC. If an acquisition involves foreign investors, parties should be aware that the Treasury can also refer acquisitions that do not meet the notification thresholds to the ACCC for a competition assessment.
The Interim Guidelines state:
"If Treasury or the ACCC identifies potential competition issues, Treasury will progress the assessment of the acquisition under the Foreign Acquisitions and Takeovers Act 1975 in consultation with the ACCC, including the ACCC’s views on the competition effects. In those circumstances, parties may wish to make a voluntary notification to the ACCC to assist with the assessment."
The FIRB requires an ACCC decision on a notification or notification waiver application to finalise the competition aspect of its assessment where the ACCC is notified under the merger control regime.
Remedies in multi-jurisdictional transactions
In cross-border transactions, the ACCC’s approach to remedies can be shaped by the remedies obtained by an international regulator. In some cases, the ACCC may elect not to require a remedy in Australia if commitments have already been made to another regulator and its competition concerns can be satisfied by those commitments. Some examples of international considerations include:
In relation to Cochlear Limited’s acquisition of Oticon Medical A/S, in June 2024 the ACCC announced it would not oppose Cochlear Limited’s acquisition of Oticon Medical despite having previously published a Statement of Issues outlining preliminary concerns in relation to the supply of bone conduct solutions. In reaching its decision, the ACCC considered the findings of the UK’s CMA which had partially blocked the original transaction due to competition concerns in the same market in the UK. The parties subsequently revised the deal to include only Oticon’s cochlear implants business and gave undertakings to the CMA to that effect. Taking into account these changes and the outcome of the CMA’s review, the ACCC concluded that the revised deal was unlikely to substantially lessen competition in the relevant Australian markets.
In relation to Microsoft Corporation’s now-completed acquisition of Activision Blizzard Inc in 2023, the ACCC suspended its review while engaging with overseas regulators. The ACCC ultimately discontinued its review of the acquisition after it considered the status and outcomes of other international regulators’ reviews and changes to the structure of the transaction.
In relation to Sika AG’s proposed acquisition of MBCC Group in 2023, the ACCC accepted an undertaking whereby Sika committed to divesting the MBCC business in Australia and also committed to the European Commission to the structural divestiture of MBCC’s chemical admixture business. The ACCC considered that the divestiture package would ensure that two key competitors remained in Australia and that they would have access to global research and development networks.
The ACCC will not follow the approach of other regulators in all cases. If the ACCC is not satisfied that a remedy from a foreign jurisdiction would resolve competition concerns in Australia, it may impose its own. For example:
In relation to Elanco Animal Health Incorporated’s acquisition of Bayer Aktiengesellschaft’s animal health business in 2020, the ACCC accepted an 87B Undertaking that included a different product for divestment as compared with other jurisdictions involved in the transaction, owing to competition concerns that were specific to Australia.
In 2020, the ACCC did not accept a behavioural undertaking offered by Google in relation to its acquisition of Fitbit, despite a similar undertaking being accepted by the European Commission.
In its joint statement with the CMA and Germany’s Federal Cartel Office, the ACCC highlighted the need for a common understanding across competition agencies about the need for rigorous and effective merger enforcement. In particular, the regulators specify the need for effective remedies, given the high levels of concentration across various markets in the United Kingdom, Germany and Australia and the fast-paced development of the digital world.[6] It may be that greater international cooperation between these regulators and in these markets is to be expected in the future.
Conclusion
While Australia’s merger control landscape is undergoing transformation, the offer and acceptance of 87B Undertakings to address theories of harm in mergers will remain an established practice in Australia.
It also remains clear that the ACCC will continue to hold a strong preference for structural undertakings. However, the recent acceptance of behavioural undertakings in decisions including Sigma/Chemist Warehouse, Qube/MIRRAT and Armaguard/Prosegur demonstrate some openness on behalf of the ACCC to entertain accepting behavioural remedies to resolve concerns. The ACCC is likely to continue to face questions as to whether a preference for structural remedies remains fit for purpose in addressing emerging theories of harm in the digital space concerning access and use of data as well as interoperability, particularly since the European Commission has signalled a willingness to accept behavioural commitments.
Only a minority of transactions notified to the ACCC involve the offer and acceptance of 87B Undertakings. Experienced counsel can provide invaluable insight to merging parties in Australia in relation to the types of remedies the ACCC generally accepts, leveraging remedies obtained by international regulators (if any), and help the engagement with the ACCC on the remedies proposal to run as smoothly and efficiently as possible.
Australia’s new merger reforms have commenced and mark the most significant overhaul of Australia’s merger control framework in decades.