Tripping the wire: New voting power triggers in Australia’s merger control regime

The number of transactions caught by Australia’s new merger control regime is set to expand considerably. While much attention has focused on Australia’s shift to mandatory merger notification, the introduction of new voting power thresholds under the new regime creates tripwire risks for dealmakers.

On 1 April 2026, share acquisitions that complete on or after that date and trip 20% or 50% voting power thresholds can trigger a notification requirement under the new regime, even if the acquisition does not result in control of the target.

As well as increasing ACCC oversight and power to intervene in a greater number of transactions, the new thresholds are expected to increase the regulatory and compliance cost burden of deal-making in Australia. They also have material implications for control strategies (whether involving public or private company targets), stake-building, governance processes and transaction execution timelines and mechanics.

The new voting power thresholds

Broadly, mandatory notification to the ACCC may now be triggered when voting power increases:

• private companies: from ≤20% to >20%
• private or public companies: from ≥20% to ≥50%
• public companies (where already controlled): from ≤20% to >20%
• public companies (where no control): from <20% to ≥50%

These notification triggers apply only if the general notification thresholds are satisfied and no exemption applies.

The thresholds are based on the ‘voting power’ of the acquirer group and its ‘associates’ (as those terms are defined in the Corporations Act with some modifications by the new regime). Both concepts are broad. When calculating voting power in non-Chapter 6 entities, votes of persons who are associates solely by virtue of minority shareholder protection rights are disregarded.

Practical considerations for deal-making

The implications of the new voting power thresholds on deal-making are many. Practical considerations include:

Deal planning – early merger clearance analysis critical

Navigating the new merger regime, including the application of the new voting power thresholds, is complex and the consequences of getting it wrong are significant (i.e. transaction is void and substantial penalties and other orders can apply). Early, reliable assessment of the application of the new regime and its implications for the transaction, including bid structure, timelines, sequencing and documentation, will be critical.

Voting power analytics

Accurately mapping and tracking the voting power held by a buyer group and its associates, with alerts for movements towards 20% and 50% (including the effects of denominator changes), will be essential to both early merger clearance analysis and ongoing compliance. This will be particularly important for financial sponsor and private capital investors where voting power assessments are expected to be complex and time consuming.

Guarding against inadvertent crossing

Investors should be reviewing existing governance controls and considering whether any uplift is needed to guard against inadvertent threshold crossings. For example, formalising a pre-trade clearance process before any acquisition of shares (including incremental stake-building, on-market purchases, block trades, placements and debt-equity conversions) or entering into other arrangements that could add to voting power and move an investor through a voting power threshold or confer legal or practical control will help manage compliance.

New frictions in strategic pre-bid stake-building

Stake-building strategies (more common in hostile and competitive bid scenarios) will need to be designed with the new voting power thresholds top of mind, noting there is no exemption in the merger control regime for on-market dealings. Rapid, opportunistic stake-building across the 20% and 50% thresholds will largely be a thing of the past.

Accumulating a stake of up to 19.9% in an ASX listed is generally exempt from notification provided it does not result in practical control. However, moving through 20%, including via the 3% creep exception to the 20% takeovers rule in the Corporations Act, adds another layer of compliance to existing takeovers regulation.

Deal structuring, timelines and documentation

Deals will need to be structured to account for the impacts of the new merger clearance regime. In addition to robust merger control conditions precedent, we expect to see transaction documents include sequencing for clearance pathways (e.g. pre-notification engagement, waiver applications (where relevant) or short /long form notifications), long stop dates, break/extension mechanics and (where relevant) appropriate bid acceptance procedures to avoid inadvertent threshold crossings before clearance.

Among other things, we also expect to see more target-friendly regulatory risk allocation mechanisms in transaction documents such as non-refundable deposits, reverse break fees and pre-commitments to specified divestitures.

Key takeaway

Under the new regime, inadvertent voting power crossings are a real execution risk, making early analysis and disciplined deal choreography essential.

This article was published as part of the Australian M&A: A review of 2025 and outlook for 2026 publication which you can read here.

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Authored by:
Franki Ganter, Partner
Edward Bartlett, Associate