AUSTRALIA Law and Practice Contributed by: Mark Grime and George Lukic, Thomsons
The Qualitative Test: Practical Control For the purposes of the qualitative test, “control” is defined as the capacity, in a real and practical sense, to determine the outcome of decisions regarding an entity’s financial and operating policies. The inquiry is substantive rather than merely formal: it requires an assessment of both legal rights and the practical influ - ence an acquirer (either alone or jointly with its asso - ciates) will be able to exert. Rights relating to budget approval, strategic planning, board composition or senior management appointments may satisfy the control test where, in substance, they confer genu - ine capacity to determine the outcome of decisions regarding the entity’s financial and operating policies, rather than merely protecting a minority investment. If an acquirer (or group of associates acting in concert) obtains this practical control, the transaction will be considered to satisfy the requisite control test. The definition of control otherwise remains substan - tively unchanged under the July Bill. The Quantitative Test: Objective Voting Power Thresholds The quantitative voting power thresholds operate alongside the qualitative inquiry. As a result, a transac - tion may still require notification where the acquirer’s voting power crosses a statutory threshold even if an acquisition does not afford an acquirer, either on its own or jointly, an ability to control a target. The 1 April 2026 legislative amendments introduced hard “voting power” thresholds. This means that even if a minority stake is entirely pas - sive, and the acquirer successfully proves they com - pletely lack practical control over the target’s policies, notification is strictly required if the acquisition results in the acquirer’s voting power crossing specific statu - tory lines. These thresholds include: • Moving from ≤20% to >20% in a private, unlisted company (fewer than 50 members). • Moving from ≤20% to >20% in a widely held or listed entity (a Chapter 6 entity, addressing sce - narios where a party already had practical control but increases their stake).
a failure to notify is prosecuted as gun-jumping cartel conduct, separate criminal penalties can also apply. 2.3 Types of Transactions The regime captures the acquisition of shares, assets, or control of an entity and looks at the substance of the transaction rather than its legal form. “Assets” Are Defined Broadly A feature of the 2026 regime is the expansive defini - tion of what constitutes an “asset”, which can include real property and leasehold interests, intangible and intellectual property, plant and equipment, and con - tractual rights (including options for land development rights or the assignment of specific supplier or cus - tomer contracts). While the legislation contains narrow “ordinary course of business” exceptions, the breadth of the asset definition means deal teams must now routinely screen standalone commercial property, IP, and licensing transactions for mandatory merger filing obligations. Discrete Asset Acquisitions A critical distinction was introduced on 1 April 2026 between acquiring “all or substantially all” of a busi - ness and “discrete asset acquisitions” (eg, purchas - ing a specific intellectual property portfolio, a single manufacturing facility, or a specific leasehold) that do not constitute all, or substantially all, of the assets of a business. Discrete asset acquisitions are subject to different, transaction-value thresholds to ensure the ACCC only reviews the transfer of assets that are competitively meaningful. Exempt Transactions Internal restructures involving related bodies corpo - rate are generally exempt, provided there is no change in ultimate control. 2.4 Definition of “Control” Under the 2026 mandatory regime, assessing “con - trol” requires navigating a dual-layered, concurrent framework. Dealmakers must assess transactions against both a qualitative “practical control” test and quantitative “voting power” thresholds. These tests are not mutually exclusive; triggering either one man - dates a formal notification (assuming the financial thresholds are also met).
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