Australia’s 2025 Merger Law Overhaul: A Guide for Charities & NFPs

Introduction

The passage of the Treasury Laws Amendment (Mergers and Acquisitions Reform) Act 2024 (Cth) marks a significant overhaul of Australian merger laws. This legislation introduces a mandatory and suspensory merger notification regime, which fundamentally alters the process for any organisation, including those in the charity sector, that is contemplating a merger or acquisition.

For charities and not-for-profits (NFPs), where mergers, acquisitions, and legal restructuring are an increasingly common strategy, understanding and complying with this new regime presents unique challenges. This guide provides essential information on the key changes to the merger laws, focusing on new compliance obligations, the risks and responsibilities involved in structural changes, and the critical steps required to protect charitable assets throughout the merger process.

Key Features of the New Merger Regime

The Shift to a Mandatory & Suspensory Notification Regime

The Treasury Laws Amendment (Mergers and Acquisitions Reform) Act 2024 (Cth) introduces a mandatory and suspensory merger notification system that applies to all sectors, including charities and NFPs. From 1 January 2026, any acquisition that meets the prescribed thresholds must be notified to the Australian Competition and Consumer Commission (ACCC) and cannot be completed until ACCC clearance is obtained. This marks a significant departure from the previous voluntary, informal system.

Notifiable mergers or acquisitions that proceed without ACCC clearance will be legally void. Additionally, organisations that breach these requirements may face substantial penalties, including:

• Fines of up to A$50 million or more
• Additional penalties based on the benefit obtained
• Penalties calculated on the turnover of the corporate group involved

The new regime captures a broad range of transactions, with “assets” defined to include property, legal or equitable rights, and goodwill. While some exceptions exist, such as acquisitions in the ordinary course of business or by operation of law, the regime potentially covers a much wider range of transactions than traditional mergers and acquisitions.

For NFPs, this means that even mission-driven transactions must be carefully assessed for compliance with the new merger laws. Consider a case where a charity plans to acquire another organisation’s service contracts or intellectual property—if the thresholds are met, notification and ACCC clearance will be required before the transaction can proceed.

Understanding the Notification Thresholds for Your Organisation’s Acquisition

The new regime applies to acquisitions where the target is connected with Australia and certain monetary thresholds are met. Notification is required if:

• The combined Australian revenue of the merger parties (including related bodies corporate and connected entities) is at least A$200 million, and either:
  • The target’s Australian revenue or the value of assets being acquired is at least A$50 million, or
  • The global transaction value is at least A$250 million
• For very large acquirers (Australian revenue over A$500 million), notification is triggered if the target’s Australian revenue or asset value is at least A$10 million
• Serial acquisitions are also captured, with a three-year look-back for previous acquisitions in the same or similar goods or services that cumulatively meet the above thresholds

To illustrate, imagine an NFP organisation that has made several acquisitions of smaller service providers over the past three years. If the combined value of these acquisitions meets the notification thresholds, any further acquisition in the same sector may also require notification, even if the individual transaction is relatively small.

The notification thresholds will be set out in subordinate legislation, and the Treasurer may set specific thresholds for particular industries or acquirers. For example, the ACCC may require notification of every merger in the supermarket sector or review purchases of interests above 20% in an unlisted or private company if one party has turnover exceeding A$200 million.

The ACCC Review Process Timelines & Filing Fees

The ACCC review process under the new regime involves multiple phases, each with specific timelines and associated filing fees:

Review Phase	Timeline & Description	Associated Filing Fee
Phase 1 Review	Initial review period of up to 30 business days, with a potential fast-track determination after 15 business days if no concerns are identified.	A$56,800
Phase 2 Review	In-depth review period of up to 90 business days if further investigation is needed, subject to extensions for information requests.	A$475,000 to A$1,595,000, depending on transaction size.
Phase 3 Review	A 50 business day review period specifically for applications based on public benefits.	An additional fee of A$401,000 applies for public benefit applications.
Fee Exemptions	Not applicable to a specific phase, but a general provision exists.	Exemptions are available for certain small entities with an annual turnover under A$10 million.

The ACCC can “stop the clock” on the review timeline if it requires additional information from the parties, particularly for complex transactions. Organisations are expected to engage in pre-notification discussions with the ACCC to clarify information requirements and avoid delays. For example, a charity planning a complex merger should budget for both the filing fees and potential additional time required to gather and submit detailed information, including market data and board documents.

The ACCC is the initial decision-maker, and the Australian Competition Tribunal can undertake a limited merits review of ACCC decisions. This new administrative model places a premium on early compliance, robust documentation, and proactive engagement with the ACCC to ensure that mergers in the charity and NFP sector proceed smoothly under the new regime.

How Changes to the Merger Test Affect the NFP Sector

The Expanded Test for Substantially Lessening Competition

Under the new Australian merger laws, the ACCC can block an acquisition if it is satisfied the transaction is likely to substantially lessen competition in any market. The reforms clarify that a merger may meet this test if it creates, strengthens, or entrenches a substantial degree of market power.

This expanded interpretation has important implications for charities and NFPs, particularly larger organisations looking to merge with others in the same sector. The ACCC will now closely examine how a merger affects the competitive landscape.

For example, if two major NFP service providers in a specific region merge, the ACCC will assess whether this consolidation gives the new, larger organisation the power to:

• Reduce service quality without facing significant competitive pressure
• Limit service variety in the region
• Create an environment where other providers cannot effectively compete

Creeping Acquisitions & the Three-Year Look-Back Provision

The new regime introduces specific rules to address “serial” or “creeping” acquisitions, which is highly relevant for any organisation growing through multiple smaller transactions. When reviewing a proposed merger, the ACCC can now aggregate its competitive effect with all other acquisitions the organisation has made over the previous three years.

This look-back provision applies to transactions involving targets that supply the same or substitutable goods or services. As a result, a series of small acquisitions, which individually might not raise competition concerns, could collectively be seen as substantially lessening competition when viewed together.

For NFPs pursuing a growth strategy through acquiring smaller entities, this three-year cumulative assessment is a critical new factor. Every additional transaction may trigger a merger notification if the cumulative thresholds are met, requiring a comprehensive review by the ACCC.

Structural Changes & Risks in NFP Mergers

Transaction Structures & the Broad Definition of Asset Acquisition

The new Australian merger regime defines an “acquisition of assets” very broadly, which has significant implications for the charity and NFP sector. This definition encompasses not just physical property but also any legal or equitable right, interest, or goodwill.

Consequently, transactions that are not traditionally viewed as mergers or acquisitions may now be captured by these merger laws. This broad interpretation is particularly relevant for many charities and NFP organisations structured as a company limited by guarantee (CLBG).

A CLBG operates with members instead of shareholders, and a merger can occur through various mechanisms:

• When the members of one entity retire
• When an acquirer becomes the sole member

Under the new regime, these changes in membership could be considered an acquisition of assets, as they involve acquiring legal rights associated with the CLBG. This may potentially trigger a mandatory merger notification to the ACCC.

Protecting Charitable Assets & Aligning Charitable Purposes

A critical consideration in any NFP merger is the protection of charitable property, especially assets held in charitable trusts. These assets are legally bound to be used only for the specific charitable purpose for which they were established.

A merger can put these assets at risk if the new, combined entity’s purpose no longer aligns with the original trust’s objective. The consequences of misalignment can be significant:

• If a merger causes the original purpose of a charitable trust to fail, an application to the Supreme Court may become necessary, potentially leading to commercial litigation
• This legal process, known as applying the property cy-près, allows the court to redirect the trust’s assets to a purpose as close as possible to the original one

However, this approach carries inherent risks, as demonstrated in Northern Sydney and Central Coast Area Health Service v A-G for NSW. A cy-près application opens the door for other parties to make a claim on the property.

This underscores the importanceof understanding charitable purposeand ensuring the objects of the merging organisations are closely aligned from the outset to avoid jeopardising trust assets.

Practical Compliance Steps for Your Organisation

Planning for ACCC Scrutiny & Proactive Engagement

Under the new Australian merger laws, it is crucial for charities and NFPs to prepare for increased scrutiny from the ACCC, similar to how they might prepare for an ACNC compliance review. Even mission-driven transactions will require robust competition analysis and thorough documentation to demonstrate compliance.

Proactive planning is essential for any organisation contemplating a merger or acquisition. Organisations should factor the new requirements into their strategic planning by:

Planning Area	Required Action
Budgeting for Costs	The new substantial filing fees must be included in transaction planning and budgets.
Adjusting Timelines	Deal timelines need to account for the full ACCC clearance process, including pre-engagement and the formal review period.
Updating Documentation	Transaction documents should include a specific condition precedent for obtaining regulatory approval from the ACCC.

For any transaction that is notifiable, especially those that are complex, early and proactive engagement with the ACCC is strongly encouraged. This approach can help ensure a smoother approval process and prevent unnecessary delays in the merger notification.

Managing Transitional Arrangements Before the New Regime Begins

The new mandatory merger notification regime will apply to all acquisitions that are ‘put into effect’ from 1 January 2026. However, there is a transitional period that provides organisations with strategic options.

Charities and NFPs can continue to use the ACCC’s current informal clearance process until the end of 2025. This current system offers several advantages, including:

• The absence of filing fees
• The potential for a confidential pre-assessment for non-complex transactions

If informal clearance is granted, the transaction is exempt from notification under the new regime, provided it is completed within 12 months of receiving that clearance.

For agreements entered into before 1 January 2026 that will be completed after this date, parties can voluntarily notify the ACCC under the new regime from 1 July 2025.

Conclusion

The introduction of the Treasury Laws Amendment (Mergers and Acquisitions Reform) Act 2024 (Cth) creates a mandatory merger notification regime, fundamentally changing how Australian charities and NFPs must approach any acquisition. This new framework requires careful understanding of notification thresholds, expanded ACCC competition tests, and unique risks to charitable assets, making proactive compliance and strategic planning essential for the sector.

To ensure your organisation is prepared for these significant changes to Australian merger laws, contact LawBridge’s expert not-for-profit & charity lawyers for a consultation. Our team specialises in the NFP sector and provides the trusted expertise needed to manage the new regime and protect your organisation’s mission.

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