ACCC chairwoman Gina Cass-Gottlieb draws $35 million battle line in lead-up to new merger laws

Reforms aimed at tightening up Australia’s lively mergers and acquisitions landscape could mean transactions worth as little as $35 million will first need to get past the competition and consumer umpire.

But Australian Competition and Consumer chair Gina Cass-Gottlieb says the new yet-to-be-set threshold that forms part of the biggest merger laws overhaul since the 1970s will only be locked in following consultation with business and industry. That threshold could also be lifted once the new rules come into place at the start of 2026.

“The Treasury task force has said that they will move to consultation on thresholds pretty quickly,” she said.

“At the moment, what they have indicated is that they’re contemplating a couple of bases for the thresholds. One is a financial metric: turnover, revenue, the transaction value in order to see how material the transaction is. They’re also contemplating that it could also be triggered by a market share level.”

Under the reforms outlined by Treasurer Jim Chalmers last week, the ACCC would have authority to target mergers deemed anti-competitive, but also process those considered pro-competition faster.

Deals that come in higher in value than the as-yet undetermined financial or market share-based threshold would need to be flagged with the ACCC and be approved before proceeding.

A public register of all mergers and acquisitions notified to the ACCC will also be established and updated, a move the watchdog claims would bring Australia into line with similar countries.

“We did early work, principally based on our experience over many years about what was roughly the level at which of particular mergers where the ACCC had thought there were problems, and that figure was $35m, that is over time though,” Ms Cass-Gottlieb said.

But the competition watchdog chair, who replaced Rod Simms in March 2022, said she wanted to make sure that threshold wasn’t so high that transactions needing further scrutiny were not missed.

“We come at this wanting to make sure the scope is wide enough. The taskforce will hear from businesses that don’t want the scope to be too wide. And as the Government’s announcement to date has shown on policy elements, they’ll strike a balance,” she said.

“We think it would be better over time to then raise it rather than to have missed transactions that mattered and then need to lower it.”

Some business groups are concerned the reforms might add another layer of dreaded red tape or threaten foreign investment into Australia, but Ms Cass-Gottlieb said it was “wrong to assume” it would make the country anti-competitive.

“The vast majority of mergers, which we know will have no likely impact on competition and are all part of incentives to invest and incentives to innovate ... will be able to proceed quickly,” she said.

“I’m confident that 80 to 90 per cent of the mergers that we look at will be treated in that way and that we will be focusing and targeting our time and our resources on the ones that are potentially anti competitive.”

Her comments come as Coles and Woolworths bosses face a grilling in a Senate supermarket prices inquiry amid a cost of living crisis, a combination that has also sparked big questions about whether the two are operating a duopoly.

Ms Cass-Gottlieb said it was “difficult” to say whether a wave of supermarket consolidation in the late 1980s to 1990s would have happened under her watch.

“What I’m certain about is we would have been better to be able to identify each transaction,” she said.

“We know there would have been better visibility. Taking it forward, it (reforms) will be very valuable.”