Why Diligence Just Got More Complex in Australian M&A

Australia is on the brink of its most significant competition law reform in nearly 50 years. As of January 1, 2026, the country will abandon its long-standing informal merger clearance regime in favor of a mandatory and suspensory system. The shift brings Australia in line with global peers like the U.S., U.K. and E.U, but also raises new compliance risks and costs for dealmakers. 

To understand the implications, SS&C Intralinks sat down with Christopher Kok and Simon Cooke, competition partners at King & Wood Mallesons (KWM), to unpack the coming changes and how they will reshape dealmaking in Australia. 

The end of the self-assessment era 

Australia has long operated under a flexible, self-assessed regime where parties could decide whether to notify the Australian Competition and Consumer Commission (ACCC). That flexibility ends in 2026. “This is probably the most substantial change to Australian merger control laws since they were introduced in 1975,” says Simon Cooke. 

Under the new regime, transactions must be notified to the ACCC before closing if they meet any of the notification thresholds, which focus on the Australian turnover of the acquirer, amongst other metrics. For example, the “very large acquirer” threshold is triggered if the Australian turnover of the acquirer is at least AUD 500 million, and the target has Australian turnover of at least AUD 10 million. Notification is mandatory when any of the thresholds are satisfied, unless the transaction qualifies for an exemption under the regime. 

Christopher Kok adds that the new system also reflects a perception by the commission that certain parties had previously failed to engage meaningfully unless prompted. “The short- and long-form applications are now far more onerous. The commission will be getting a lot more information upfront than they did under the informal process,” he explains. 

The policy shift also reflects a move toward transparency. “Previously, a large portion of clearances were done confidentially,” Cooke says. “Now, there will be a public register, published decisions and more clarity around how the ACCC assesses transactions.” 

Costs, complexity and consequences 

With the new system comes a user-pays model. The initial filing fee is AUD 56,800, and phase two reviews could cost between AUD 475,000 and AUD 1.595 million. Cooke warns that this could materially change deal behavior. “You’ll start seeing contracts that allow parties to walk away before phase two to avoid the fee.” 

More importantly, failing to notify doesn’t just risk a fine — it also invalidates the transaction. “It’s void as a matter of law,” says Kok. “And that has serious implications for ownership, tax and employee arrangements." 

Cooke emphasises that many parties may fall into non-compliance without realizing it. “There will be a lot of inadvertent breaches, especially in real estate or financial services. People simply won’t realize their deal needs to be notified.” 

The importance of pipeline mapping 

A key risk of the new regime is over-capture. The notification thresholds are relatively low, and the rules allow for transactions to be aggregated. That means a series of small acquisitions, especially in a roll-up strategy, could collectively trigger the notification requirement. 

“You have to think in advance,” says Cooke. “What does your pipeline look like? How many acquisitions are you planning in the next 12 to 36 months? Because you may hit the threshold cumulatively.” 

Kok points out that funds and serial acquirers are already doing internal mapping exercises to understand their exposure. “They’re looking at their control structures, connected entities and previous acquisitions to track cumulative revenue, because one oversight could render an entire deal void.” 

The changing face of competitive bidding 

While the new regime helps level the playing field for foreign investors who previously had to engage with the Foreign Investment Review Board (FIRB), it also introduces new challenges for strategic bidders. 

“You can’t notify the ACCC until you’re the preferred bidder,” says Cooke. “That takes away the ability to de-risk execution before final bids. Strategics, who are more likely to raise competition concerns, are disadvantaged.” 

In competitive sale processes, this will change how vendors assess bidders. “Execution risk is now real,” adds Kok. “If one bidder could trigger a phase two review and the other won’t, that might influence who wins the deal.” 

The significant cost of phase two may also discourage parties from pursuing marginal deals. “You’ll see fewer parties running the gauntlet on 50/50 deals,” says Cooke. “The risk and cost are just too high.” 

Due diligence in the new era 

The new regime places greater pressure on early-stage diligence. Beyond assessing business fundamentals, parties must now assess whether the transaction itself is legally viable. 

“You need to confirm that the target actually owns what it says it owns,” says Simon. That might sound obvious today, but as he points out, it's a future-facing risk that will only become more apparent over time. “If a previous acquisition should have been notified and wasn’t, that transaction might technically be void, and the target isn’t the legal owner. That’s a major diligence risk.” 

This is a risk that may not materialize immediately but could surface years later when assets acquired under the new regime are audited, refinanced or resold. In such scenarios, businesses may discover they never held a valid legal title to an asset due to a historical failure to notify the ACCC in accordance with the new requirements. 

Kok adds that deal teams will need to collect more detailed data. “Overlaps, vertical integration, historical acquisition data, turnover attribution — this all needs to be mapped. You have to be able to justify why a deal is or isn’t notifiable.” 

As a result, diligence teams will need to adopt a more forensic and forward-looking approach. The focus extends beyond executing the current transaction to ensuring that acquired assets do not give rise to legal or operational complications in the years ahead. 

Making ACCC compliance business as usual (BAU) 

While the transition is expected to create some initial uncertainty in the market, both partners are confident that dealmakers will adjust over time.  

“We’ve seen from policy statements that this isn’t intended to suppress deal flow,” says Cooke. “The goal is visibility, not volume reduction.” 

Kok agrees. “Smart clients are already embedding this into BAU. Like with FIRB, it will become a normal part of doing deals in Australia. It’ll just take time.” 

As January 2026 approaches, their advice is simple: Be proactive, map your pipeline, understand your control structures and engage early with the ACCC where appropriate. 

“Plan ahead, know your thresholds, and factor clearance into every deal,” adds Cooke. “Because under this new regime, surprises can be costly.” 

Dealmakers who invest early in robust processes, pipeline mapping and transparent collaboration will be best positioned to execute with confidence under the new regime. By leveraging tools like DealCentre AITM, deal teams can centralize diligence, securely share sensitive data and stay audit-ready — turning regulatory complexity into a competitive edge.