Forecasting the future: navigating the ACCC in energy deals

What you need to know

• While investors and proponents still need to consider the ACCC's merger control regime when establishing or investing in energy projects, 8 months into the new regime greater confidence in the application of exceptions to the regime (particularly for ordinary course of business and derivatives) means many typical transactions will not need to be notified. The proposed removal of the automatic voiding of acquisitions for failure to file will give even more confidence in relying on those exceptions.
• Energy projects and transactions that do need to be notified can take comfort that the ACCC's approach to the substantive competition assessment is now well established, with the ACCC recognising that the markets are competitive and growing, with the primary concerns being vertical integration between generation, retail and networks.

What you need to do

• Investors and proponents need to continue to adopt a disciplined approach to assessing whether energy project acquisitions of shares or assets are notifiable under the new regime.
• Where notification is required, ensure appropriate conditions are built into transaction documents and that the review process, including pre-consultation, is factored into the transaction timetable.
• Engage early with the ACCC via the acquisitions portal, conduct rigorous threshold analysis, and structure transactions, including PPAs, carefully to take advantage of available exceptions.

Australia’s energy sector is undergoing a profound structural transformation. The transition to renewables, and electrification, the development of data centres, the success of battery energy storage systems, and digital transformation of retail portfolios continue to create opportunities in the sector.

The commencement of Australia’s new mandatory and suspensory merger control regime on 1 January 2026 has introduced a new layer of complexity, requiring energy market participants and investors to navigate a fundamentally different regulatory landscape even if, ultimately, the Australian Competition and Consumer Commission's (ACCC's) approach to mergers and acquisitions in this sector has landed on the side of green-lighting deals. 

This article explores the reach of the new regime, examines the ACCC’s track record in assessing energy transactions, and offers practical guidance for those structuring and advising on energy transactions.

Understanding the reach of the new merger regime (and its limits)

Since 1 January 2026, it has been mandatory for businesses to notify certain acquisitions of shares or assets to the ACCC and to secure clearance before the acquisition may be put into effect. The legal framework has been adjusted a number of times since, and there is legislation before Parliament that will make further amendments. However, in broad terms, acquisitions of shares and assets are required to be notified where certain monetary thresholds are met, which can vary depending on the revenue of the parties and whether the acquisition is of shares, assets comprising a business or discrete assets.  The thresholds are also subject to exceptions and to special rules for major supermarkets (but which the Minister can expand in the future).

The notification thresholds are complex. At a simplified level:

• acquisitions of shares in a corporation or of assets comprising a business by a "very large corporate" (i.e. a corporate group with revenue of $500 million or more) will be notifiable if the Australian revenue attributable to the target is $10 million or more (including revenue of acquisitions in the same market, disregarding geography, in the previous three years);
• acquisitions of discrete assets by a very large corporate will be notifiable if the transaction value is $50 million or more;
• acquisitions of shares in a corporation or of assets where the parties have a combined Australian revenue of $200 million or more (the large or larger corporate group threshold) will be notifiable if the revenue attributable to the target is $50 million (including revenue of acquisitions in the same market, ignoring geography, in the previous three years);
• acquisitions of discrete assets where the parties have a combined Australian revenue of $200 million or more (the large or larger corporate group threshold) will be notifiable if the transaction value is $200 million or more; or
• if either the very large corporate group or large or larger corporate group revenue thresholds are met on a three year look back basis, then acquisitions of discrete assets to be used as part of the same business may also be notifiable.

More information is available at Australian Merger Reforms FAQs | Ashurst Perkins Coie.

Relevantly for the energy industry, the new regime defines the concept of assets very broadly. An acquisition of assets includes land acquisitions (and interests in land), other property as well as legal and equitable rights that are not property. This raised concerns that large scale contracts entered into by large players in the energy sector could trigger mandatory ACCC notifications, including:

• Power Purchase Agreements (PPAs), particularly given the potentially high market value of PPAs and similarly virtual tolling arrangements or other similar revenue contracts;
• land acquisitions for new or expanded projects or networks;
• the grant of tenure or licences from Government agencies;
• large procurement contracts, and also licences for intellectual property rights associated with new technologies and services; and
• the creation of joint ventures, including unincorporated joint ventures.

For renewable generators and developers which rely on PPAs as their primary offtake and financing mechanism, and which require security of land tenure as the foundation of any project, this created real commercial uncertainty, particularly given that one of the automatic consequences of failure to file is that the acquisition is void ab initio (i.e. "as if it never happened"). The Government is addressing this issue through Schedule 4 of the Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill, introduced into Parliament on 2 July 2026, which proposes to replace automatic voiding with a court-supervised model under which a non-notified acquisition is voided only if the Federal Court so orders on application by the ACCC.

As the regime has settled, and following amendments to the Competition and Consumer (Notification of Acquisitions) Determination 2025 (Cth) (the Determination), there is now greater confidence that PPAs and most land acquisitions will typically not need to be notified.

The key developments include:

• market participants and their advisers becoming more comfortable in relying on the "ordinary course of business" exception, which applies to acquisitions of assets generally but not shares (and takes those acquisitions out of the jurisdiction of the new regime) and its extension, through a specific exception, to acquisitions of interests in land (section 4(4)(b) of the Competition and Consumer Act 2010 (Cth) (CCA) and section 2-20(1A) of the Determination); and
• a specific exception for the acquisition of a derivative or a share or asset that results from a derivative (including derivatives over physically settled commodities), provided that the acquisition does not result in the acquirer gaining control of an entity it did not previously control, or acquiring all or substantially all of the assets of a business (section 2-23(7) of the Determination).

The combination of these exceptions together with further guidance from the ACCC that we discuss below has provided greater comfort that ordinary course PPAs and land acquisitions are more likely to be exempt from notification.

Ordinary course of business exception

The concept of acquisitions in the ordinary course of business has been in the CCA for a long time, but there is no relevant case law, and only limited guidance from Government or the ACCC as to when it will apply.

The question is whether the particular type of acquisition is undertaken routinely by businesses in the Australian economy (or arguably a similar industry setting, not necessarily by the acquirer itself) and 'naturally passes without examination'.  As the focus is on ordinary course of business in general, large or infrequent transactions can still qualify as being in the ordinary course.

The explanatory materials helpfully include examples of transactions in the energy sector that may be in the ordinary course of business, being:

• energy generator acquiring land for a solar farm; and
• an energy distributor acquiring land to build pylons on as examples of land acquisitions in the ordinary course.

However, the explanatory materials also warn that an acquisition that may have an anti-competitive purpose, an acquisition from a competitor or potential competitor, including acquiring land that a competitor is currently using, or transferring production capacity (e.g. manufacturing facilities) from one competitor to another and land-banking will not qualify; although the precise legal basis for this conclusion is not explained.

Despite the uncertainty, this exception provides comfort to energy industry participants, as acquisitions of interests in land and other foundational revenue contracts (such as PPAs) are common, and therefore likely to enjoy this exception.

Derivative exception

PPAs with financially or virtually settled structures for electricity and green products are typically derivative contracts that will fall within the derivative exception provided that they do not confer control and are entered into in the ordinary course of business. This means that a standard PPA or offtake agreement will generally fall outside the mandatory notification regime insofar as it relates to the acquisition of a derivative. However, where a PPA is bundled with governance rights, equity stakes, or step-in/buy-out rights that could confer control over the counterparty (that is, provide the capacity to determine the financial and operating decisions of the entity), then further analysis is necessary before relying on this exception.

The ACCC’s track record in energy mergers

In terms of the substantive assessment of the competitive impact of acquisitions that are required to be notified, the ACCC has demonstrated an acceptance that the transformation of the energy industry means, especially in electricity, that the energy generation and storage market is growing and competitive, together with a willingness to accept that decarbonising energy is a material public benefit.

On the other hand, the ACCC continues to scrutinise the extent to which parties holding interests in transmission and distribution networks may have the opportunity to favour generation and storage projects or retail operations pursued by related parties, including whether the ring-fencing and other regulatory requirements that apply to networks are sufficient to that mitigate potential risks.

The ACCC’s long record concerning electricity generation and storage assets reveals a consistent analytical framework.

• On 14 December 2010, the ACCC cleared a series of potential acquisition combinations by Origin Energy and AGL of NSW government-owned electricity retail businesses and generation trading rights (known as “Gentrader” contracts) as part of the NSW electricity industry privatisation. The ACCC concluded that competitive tension would be preserved by a separate third-party acquirer of EnergyAustralia, continued competition from other generators, and multiple competing bidders for development sites. The ACCC also found that vertical integration of generators and retailers was unlikely to change generator bidding incentives or retailer conduct, or to raise barriers to entry.
• This permissive approach reached its limits in 2014, when the ACCC formally opposed AGL’s proposed acquisition of Macquarie Generation (which was then NSW’s largest generator) under section 50 of the CCA. The ACCC’s concern was that the transaction would produce a permanent structural change, creating vertically integrated dominance in both wholesale and retail markets. The Australian Competition Tribunal ultimately granted conditional authorisation, requiring AGL to offer at least 500 MW of electricity hedge contracts annually to smaller NSW retailers for seven years.
• Most recently, in 2023, the ACCC authorised the approximately $18.7 billion acquisition of Origin Energy by a consortium comprising Brookfield and its institutional partners and EIG (acquiring through its MidOcean Energy vehicle), subject to a section 87B undertaking. That undertaking included a “Green Build-out Plan”, commitments concerning renewable generation and storage assets, and provisions addressing PPAs to enable third parties to develop and own renewable generation and storage projects. This signalled the ACCC's willingness to take account of the public benefit arising from the renewable energy transition.
• In 2024, the ACCC decided not to oppose a consortium including Brookfield and Temasek from acquiring Neoen SA, subject to a divestiture undertaking. The primary concern related to Brookfield's interest in the AusNet transmission network in Victoria, and whether that might give it the incentive and ability to foreclose the merged entity's rivals in favour of its own operational assets and development pipeline in Victoria. The ACCC was ultimately comfortable subject to the divestiture undertaking which removed the vertical integration in Victoria.
• Most recently, on 6 May 2026, the ACCC cleared Sembcorp's acquisition of Alinta unconditionally without proceeding to a Phase II review. While acknowledging that Sembcorp did not own any operating assets in Australia or have any interests in entities active in the Australian energy sector, the ACCC focussed on the fact that Temasek, Sembcorp's largest shareholder, had indirect minority interests in Jemena (through Singapore Power which owns 40% in Jemena's parent) and Neoen (an indirect 14.19% interest), giving rise to vertical links and horizontal overlaps. The ACCC was interested in whether the indirect minority Jemena interest raised foreclosure concerns, as well as whether there would be a reduction in competition through horizontal aggregation in the generation and supply of wholesale electricity in the NEM and WEM. The ACCC ultimately determined that a foreclosure strategy would not be profitable because it would result in Jemena selling less without a material benefit, and importantly also observed that the regulatory frameworks may mitigate such action. The ACCC also found there would be no potential for reduced competition in the NEM or WEM because Temasek's minor interest in Neoen meant that it would be unlikely for Alinta and Neoen to compete as a single entity and, even if they did, their combined market share would be small and they would face competition from a range of alternative suppliers.

Several patterns emerge from these decisions. First, the ACCC places real weight on market concentration in both wholesale and retail electricity markets. Second, vertical integration between generation and retail supply, and its effect on generator bidding incentives, retailer conduct, and barriers to entry, is often a central concern, but one that can be overcome with careful analysis and evidence. (Notably, the ACCC’s Merger Assessment Guidelines expressly identify an electricity retailer acquiring a generation business supplying multiple retailers as a worked example of a vertical merger requiring detailed effects analysis.) Third, the ACCC has shown a willingness to accept undertakings and conditions rather than imposing blanket prohibitions, including behavioural conditions.

Conclusion

The ACCC’s approach to energy mergers reflects a sophisticated focus on vertical integration, market concentration, and the structural dynamics of Australia’s transitioning electricity markets. The new mandatory merger control regime introduces heightened procedural discipline and real timing risk. However, the resolution of uncertainty around PPAs and land acquisitions provides welcome clarity for energy market participants. Those advising on energy transactions should embrace early engagement with the ACCC via the acquisitions portal, rigorous threshold analysis, and careful transaction structuring to navigate this regime effectively.

Want to know more?

• Australian Merger Reforms FAQs | Ashurst Perkins Coie

Authors: Justin Jones, Partner; Alyssa Phillips, Partner; Ross Zaurrini, Partner; Tihana Zuk, Partner; Melissa Fraser, Partner; John McKellar, Partner; Peter Armitage, Partner.