AUSTRALIA Law and Practice Contributed by: Mark Grime and George Lukic, Thomsons
Australian turnover of targets acquired in the same or substitutable sectors over the past three years is ≥AUD10 million. For the cumulative threshold, only individual prior transactions with a target turnover >AUD2 million count toward this aggregation. Acquisition Thresholds For the acquisition of discrete assets that do not com - prise all or substantially all of the assets of a business, satisfaction of the following thresholds will give rise to a notification requirement: • Large Merged Firms – Acquirer group’s gross Aus - tralian revenue is ≥AUD200 million, and the trans- action value is ≥AUD200 million. • Very large acquirer – Acquirer group’s gross Aus - tralian revenue is ≥AUD500 million, and the trans- action value is ≥AUD50 million. Discrete asset acquisitions with a transaction value of ≥AUD2 million may also be captured where the creep - ing acquisitions threshold has otherwise been met. Specific Thresholds and Ministerial Designations The Treasurer possesses the statutory power to “des - ignate” specific sectors or classes of acquisitions that will be subject to lower or bespoke jurisdictional thresholds. This mechanism is specifically intended to capture “creeping acquisitions” in highly concentrated markets where incremental transactions would other - wise fall below the general economy-wide triggers. This power was first exercised via the Competition and Consumer (Notification of Acquisitions–Super - markets) Determination 2025. Under this instrument, designated “major supermarkets” are subject to a strict zero-dollar notification threshold for the acqui - sition of any “supermarket business” or land intend - ed for supermarket use. This designation effectively overrides the general monetary and discrete asset thresholds mandating ACCC notification for all such transactions regardless of value or scale. Other sec - tors that have been identified as priority sectors for potential designation include liquor, fuel retailing, cer - tain health and medical services, and childcare and early learning. Given the dynamic nature of applicable
thresholds, regularly checking for updated ministerial determinations is recommended. 2.6 Calculations of Jurisdictional Thresholds The calculation of jurisdictional thresholds requires a technical assessment of Australian revenue and global transaction value, with specific rules governing cur - rency conversion and asset valuation. Both revenue and transaction value must be calculated as of the “contract date” (the date the definitive agreement is executed). Australian Revenue (Turnover) Test The “Australian revenue” threshold is calculated based on gross revenue derived from sales to customers in Australia in the last full financial reporting year. • Nexus: Revenue is attributed to Australia if the customer is located in Australia, regardless of the billing entity’s domicile. • Basis of calculation: Revenue must be calculated on a “gross” basis (excluding GST and other taxes) and is derived from the entity’s audited financial statements for the most recently completed finan - cial year. • Valuation method: The revenue threshold is based on book value as recognised under Australian Accounting Standards (or equivalent international standards). Transaction Value The transaction value threshold is a “global” test, meaning the total value of the deal is assessed even if only some of the assets or part of the business are located in Australia. Valuation method The value is the higher of: • the fair market value of the shares or assets being acquired; or • the total consideration (received or receivable) as stipulated in the transaction documents. Inclusions The value must include all cash, equity, assumed liabilities, and the estimated value of contingent con - sideration, such as earn-outs or deferred payments.
16 CHAMBERS.COM
Powered by FlippingBook