Merger notifications shift focus to large, high-impact transactions

Mandatory thresholds and filing fees for mergers and acquisitions have been increased for the first time in almost a decade. This follows a review of merger activity over a period of two financial years.

The revised thresholds are a considered intervention to reduce red tape and ensure that mandatory notifications remain focused on transactions most likely to raise competition or public interest concerns, the Competition Commission said in a statement.

Minister of Trade, Industry and Competition Parks Tau gazetted the amended thresholds in the first week of May following the review.

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The commission assessed how many notifications would likely fall away under substantially revised thresholds, what this would mean for fee revenue, and whether any competition or public interest concerns could be missed.

“The findings showed that a significant drop in notifiable mergers is possible without weakening enforcement, particularly because many transactions that would fall below the new thresholds were previously approved without conditions.”

The commission’s research indicates that the revised thresholds could materially reduce merger notifications without compromising competition or public interest oversight, thereby improving the overall efficiency of the merger control regime.

Investment climate

Law firm Webber Wentzel partners Daryl Dingley, Dudu Mogapi and senior associate Gina Lodolo note that in the nearly ten years since the thresholds were last adjusted, the investment climate has been marked by slow economic growth and regulatory hurdles.

Inflation and business growth have steadily eroded the thresholds’ filtering function, resulting in smaller transactions becoming notifiable.

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“Consequently, parties to smaller and mid-market deals have borne the cost and delay of legal and economic analysis, filing fees, and protracted approval timelines, often in circumstances where no genuine competition concerns arise,” they add.

“Therefore, the question now is whether these increased thresholds will translate into a materially more efficient merger process, to the benefit of the commission and transacting parties.”

The higher thresholds should result in fewer mandatory notifications, thereby increasing the commission’s capacity to focus its limited resources on mergers that raise substantive competition or public interest concerns, as well as larger transactions with greater potential to contribute to economic growth, the Webber Wentzel team add.

Source: Webber Wentzel

Anthony Norton, managing director at Nortons Inc, says the changes to the merger thresholds have both positive and negative implications.

On the positive side, the increased thresholds will obviate the need for many small and medium-sized transactions to obtain regulatory approval from a competition law perspective.

Costly and time-consuming

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“This should hopefully facilitate commercial activity and enable parties to close transactions more quickly and efficiently.” Norton adds.

He notes that securing competition approval can be a costly and time-consuming process, particularly given the way in which the competition authorities interpret the public interest aspects of of the merger approval process.

In defence of the authorities, he points out that many of the delays are caused by significant staff shortages at both the Competition Tribunal and the Competition Commission.

“It is an issue which the Minister of Trade Industry and Competition should have resolved many months ago,” says Norton.

The one negative aspect associated with the significant increase in merger thresholds is that it may mean that fewer transactions may be classified as large mergers.

As third parties can only apply to intervene in large mergers, this could make it much more difficult for them to intervene in potentially problematic mergers.

However, it is still possible for third parties to raise complaints about problematic transactions. “We know from experience that intervention has often proved to be a decisive mechanism for preventing anti-competitive transactions,” says Norton.

Retrospective impact

The Webber Wentzel team advises dealmakers to assess whether transactions in the pipeline are impacted.

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The retrospective application means that transactions concluded before 1 May 2026, which had not yet been notified to the commission, must be assessed against the new, higher thresholds.

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“In practical terms, this means that a transaction which would previously have triggered mandatory notification under the former thresholds may now fall below the revised thresholds, with the result that the parties are no longer required to notify.”

For merger transactions that now fall below the threshold but were notified after 1 May 2026, things may be less straightforward.

The commission may take the view that it will continue its investigation of such transactions, particularly where substantive assessments are already underway.

“Factors that may inform this approach include the administrative complexities associated with refunding filing fees already paid, as well as instances where the commission has, during its investigation, identified genuine competition or public interest concerns warranting further scrutiny.”

The Webber Wentzel team advises parties in this position to engage directly with the commission to obtain clarity on the matter.

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