Australia is on the cusp of a significant shift in how mergers and acquisitions are regulated. From 1 January 2026, the Australian Competition and Consumer Commission (ACCC) will enforce a mandatory and suspensory merger notification regime, replacing the current voluntary system. This overhaul is set to reshape strategic planning, due diligence and deal execution across all sectors, including recruitment.
A New Regulatory Framework
Earlier this year, the ACCC released guidance on the transition to the new merger control process. The reforms, legislated in November 2024, will require that any acquisition meeting specified thresholds must be notified to—and approved by—the ACCC before completion (grtlawyers.com).
A voluntary notification period opens on 1 July 2025, enabling early engagement for mergers in planning. From 1 January 2026, notification becomes compulsory for eligible transactions. During the transition:
- Informal clearance requests under the current regime close on 31 December 2025.
- Merger authorisation applications cease on 30 June 2025 (grtlawyers.com).
Transactions cleared before 31 December 2025 remain valid if completed within 12 months, otherwise they will require re-notification under the new rules (grtlawyers.com).
Key Notification Thresholds and Timelines
The legislation establishes new thresholds for mandatory notification:
- Combined Australian turnover ≥ $200 million, and either target turnover ≥ $50 million or transaction value ≥ $250 million.
- Very large corporate group: acquirer turnover ≥ $500 million and target turnover ≥ $10 million.
- Serial or creeping acquisitions: cumulative buys over three years exceeding $50 million (or $10 million for large acquirers) (dmawlawyers.com.au, allens.com.au).
A streamlined Phase I review must conclude within 30 business days (with possible extensions); Phase II reviews may extend up to 90 business days, plus an optional 50 business days for public benefit assessment (accc.gov.au).
ACCC Process and Compliance Expectations
To manage the heightened demands of the new regime, the ACCC expects:
- Pre-notification engagement, especially for complex deals, ideally two weeks before lodging (accc.gov.au).
- Robust economic analysis and data to support notifications; insufficient information may trigger a “stop the clock” on review timelines (hwlebsworth.com.au).
- Continued enforcement of the substantial lessening of competition test (Section 50), even for deals below notification thresholds (hwlebsworth.com.au).
- A new Acquisitions Register, providing transparency on notified transactions and ACCC decisions (russellkennedy.com.au).
The ACCC chair has emphasised that this regime is intended to identify and prevent anti-competitive mergers while allowing benign transactions to proceed more swiftly via faster phase‑1 clearance (ft.com).
Implications for Recruitment Firms
These reforms carry sizeable implications for recruitment sector M&A strategies:
- Early engagement is critical: Firms contemplating growth through acquisition should begin planning notification as early as mid‑2025. Voluntary notifications may benefit deals requiring ACCC scrutiny well in advance of the new regime.
- Deal timelines will extend: Firms should calibrate due diligence and transaction schedules to accommodate phase‑I and phase‑II timelines, as well as data gathering periods.
- Serial acquisitions need oversight: Recruitment businesses executing multiple smaller acquisitions could trip cumulative thresholds, triggering mandatory review. Consolidation strategies should account for this aggregation rule.
- Competition analysis must be rigorous: Even smaller acquisitions may risk blocking under the Section 50 test. Firms must prepare for competitive impact assessments, particularly in niche markets or regions.
- Register transparency: With public disclosure of notifications and decisions, recruitment firms must anticipate reputational visibility real early on in the planning phase.
Strategic Recommendations
For agencies considering acquisition-led expansion:
- Audit M&A pipeline to identify deals likely to exceed thresholds.
- Engage legal and economic advisers now to map notification strategy, including waiver options.
- Collect relevant market data early, such as turnover figures, market concentration metrics and competitive impact assessments.
- Plan phased integration, allowing for the ACCC timeline and potential outcomes.
- Monitor ACCC guidance and Treasury instruments for updates on thresholds, forms and waiver mechanisms.
This represents the most significant reform of Australia’s merger regime in five decades. For recruitment firms pursuing scale, securing investor confidence or navigating consolidation, adapting to these changes will be imperative. Early attention to compliance, transparency and strategic timing can distinguish successful deals from missed opportunities.
Sources
- GRT Lawyers: ‘Australia’s Merger Laws Are Changing: Key Updates from the ACCC’ (8 April 2025) (grtlawyers.com, hwlebsworth.com.au, dmawlawyers.com.au, wsj.com)
- ACCC merger control overview and timelines (accc.gov.au)
- Allens: thresholds and process guidelines (allens.com.au)
- HWL Ebsworth: mandatory notification regime details (hwlebsworth.com.au)
- Corrs: transitional guidance and ACCC expectations (corrs.com.au)
- ACCC Chair public statements (dmawlawyers.com.au)
