How South Africa's 2026 Merger Threshold Changes Affect M&A and Commercial Transactions, A Practical Guide for Deal Teams

On 27 January 2026, the Minister of Trade, Industry and Competition published draft amendments to the merger notification thresholds and filing fees under the Competition Act 89 of 1998, marking the most significant South Africa merger threshold changes 2026 cycle in years. The proposals, published in Government Gazette No. 54020 (GN 7029), raise both the combined and target-firm thresholds and increase merger filing fees for intermediate and large transactions. Industry observers expect the new rules could take effect as early as mid-March 2026 following the close of the public comment period, which means deal teams negotiating or signing transactions right now face immediate compliance, budgeting and drafting questions.

This guide walks in-house counsel, corporate finance advisers and M&A project leads through every practical step, from notifiability assessment and fee planning to sample conditionality clauses and risk-mitigation strategies.

Executive Summary: Immediate Action for Deal Teams

Before reading the full analysis, deal teams should note two critical action items flowing from the South Africa merger threshold changes 2026 proposals:

• Check your numbers now. The draft amendments propose raising the combined turnover-or-assets threshold to R1 billion and the target-firm threshold for intermediate mergers to R175 million. Any transaction that currently triggers a mandatory filing may fall below the new thresholds once they take effect, and vice versa for deals previously considered non-notifiable.
• Monitor the effective date closely. The Gazette invited public comments within 30 business days of publication, placing the comment deadline in early March 2026. Leading practitioner commentary from Bowmans anticipates the amended thresholds and fees could become effective as early as mid-March 2026. Deals closing around that window should build optionality into their conditionality provisions.

The bottom-line decision rule is simple: re-run the notifiability calculation for every live or pipeline transaction using both the current and the proposed thresholds. Where the outcome changes, adjust your timeline, budget and merger condition precedent language accordingly.

What Changed: The Proposed Thresholds, Fees and Statutory Basis Under the Competition Act Amendments 2026

Section 11(5)(a) of the Competition Act empowers the Minister, in consultation with the Competition Commission, to determine and adjust the monetary thresholds that separate notifiable mergers from non-notifiable transactions. The draft amendments published on 27 January 2026 in Government Gazette No. 54020 propose to increase the merger notification thresholds South Africa has applied since the last adjustment, as well as the filing fees payable on intermediate and large merger notifications.

The rationale, as outlined by the Department of Trade, Industry and Competition (DTIC) and echoed by Werksmans Attorneys, is to reduce the administrative burden on the Competition Commission by filtering out smaller transactions that do not raise material competition concerns, thereby freeing resources for the scrutiny of larger, more complex deals.

Quick Numeric Summary

All figures are drawn from the Government Gazette (GN 7029) and corroborated by the Cox Yeats and DLA Piper Africa legal updates published on 29 January 2026. Parties should consult the Competition Commission’s official merger thresholds page for the definitive current figures, which serve as the baseline for the above comparison.

Who Is Affected? Notifiable Transactions South Africa, Worked Examples and Decision Tree

The shift in both the combined and target thresholds means that a meaningful number of mid-market transactions will move out of the notifiable category entirely, while a smaller cohort of transactions that were previously near the borderline for large-merger classification may now fall into the intermediate tier. Deal teams should reassess every transaction in their pipeline against the proposed numbers.

Worked Example 1: Small Cross-Border Asset Acquisition

A foreign buyer with South African turnover of R500 million acquires a local target with assets of R120 million. Under the current thresholds (combined R600m, target R100m), the combined figure is R620 million and the target exceeds R100 million, the deal is notifiable as an intermediate merger. Under the proposed thresholds, the combined figure of R620 million falls below the new R1 billion combined threshold, so the transaction would no longer be notifiable. The buyer saves R220,000 in filing fees and avoids the associated regulatory timeline.

Worked Example 2: Regional Roll-Up That Now Meets the Combined Threshold

A South African private equity fund with a portfolio generating combined turnover of R950 million plans to acquire a target with turnover of R200 million. Under the current thresholds, the combined figure of R1.15 billion and target of R200 million clearly trigger a large merger notification. Under the proposed thresholds, the transaction remains notifiable (combined exceeds R1 billion and the target exceeds R175 million), but it may reclassify from large to intermediate depending on the large-merger threshold adjustments, requiring the deal team to verify which filing tier and fee schedule applies.

Worked Example 3: Joint Venture Formation

Two mid-sized South African firms with respective turnovers of R400 million and R350 million form a joint venture. The combined figure of R750 million and each party’s contribution exceed R100 million but fall below R175 million for the individual target test. Under current rules, this joint venture is notifiable. Under the proposed thresholds, the combined figure sits below R1 billion and neither party’s contribution crosses R175 million, the joint venture is likely non-notifiable.

Decision Tree: Is Your Transaction Notifiable?

1. Calculate the combined turnover or assets of the acquiring firm (and its group) and the target firm, using the most recent audited annual financial statements.
2. Compare against the combined threshold, currently R600 million, proposed R1 billion. If the combined figure falls below the threshold, stop: the transaction is not notifiable.
3. Calculate the target firm’s turnover or assets separately. Compare against the target threshold, currently R100 million, proposed R175 million. If the target figure falls below the threshold, the transaction is again not notifiable even if the combined threshold is met.
4. If both thresholds are exceeded, determine whether the transaction falls into the intermediate or large merger category by reference to the relevant higher-tier thresholds and proceed to file.

Deal teams should gather the necessary financial data during early-stage due diligence and run the calculation under both current and proposed thresholds until the final effective date is confirmed. For a related overview of selling a business in South Africa, consult our quick guide for sellers.

Merger Filing Fees 2026, Timelines and Immediate Practical Implications

The proposed fee increases represent a uniform 33% uplift across both intermediate and large merger categories. While the absolute amounts may appear modest in the context of deal value, serial acquirers executing multiple transactions per year will see a material cumulative impact on deal budgets. The fee increase also comes at a time when the Competition Commission is signalling a desire for greater efficiency, industry observers expect that a smaller caseload of higher-value notifications will allow the Commission to process each filing more quickly.

From a budgeting perspective, M&A South Africa 2026 deal models should reflect the higher fees in their transaction-cost waterfall from the point the proposed thresholds take effect. Where a deal is signed before the effective date but filed after it, the higher fee is likely to apply, deal teams should include a buffer or an express cost-allocation provision in heads of terms.

Timeline Comparison: Impact on Deal Timelines

Webber Wentzel has noted that higher thresholds could lead to a more efficient merger review process by allowing the Commission to focus on transactions with genuine competition implications. This is an important consideration when setting drop-dead dates in transaction documents.

Effective Date, Transitional Rules and Deals in Flight

The draft amendments were Gazetted on 27 January 2026. The notice invited interested parties to submit written comments within 30 business days of publication. Based on the standard South African business-day calendar, this places the comment deadline in early March 2026. Industry observers, including Bowmans in their 28 January 2026 alert, have suggested the new thresholds and fees could take effect as early as mid-March 2026, once the Minister considers public comments and publishes a final determination in the Gazette.

Critically, the Competition Act does not provide detailed transitional rules for deals that straddle the old and new thresholds. The recommended approach for transactions currently in flight is as follows:

• Deals already filed but not yet decided: The filing was made under the current thresholds and fees. Early indications suggest the Commission will process these under the rules in force at the date of filing.
• Deals signed but not yet filed: If filing occurs after the effective date of the new thresholds, the deal team should assess notifiability under the new thresholds. A transaction that was notifiable under the old thresholds but falls below the new ones may no longer require filing, but parties should confirm this position with the Commission before proceeding to close without clearance.
• Deals in negotiation: Draft the merger condition precedent and filing obligations by reference to both sets of thresholds. Include a mechanism to adjust or remove the condition if the transaction falls below the new thresholds once they take effect.

Practical Deal Team Checklist: Competition Compliance South Africa, Timeline Management and Budget Planning

The following checklist is designed for in-house counsel and transaction project leads managing competition compliance South Africa obligations for live deals:

1. Pre-due diligence: Obtain audited annual financial statements for the acquiring group (including all South African entities) and the target. Extract turnover and total asset figures for the most recent financial year.
2. Dual-threshold analysis: Run the notifiability calculation under both the current and proposed thresholds. Document the outcome and flag any transaction where the result differs between the two regimes.
3. Heads of terms: Include a merger condition precedent that references the Competition Act generally (not specific threshold numbers) and provide for the condition to fall away automatically if the transaction is non-notifiable under the thresholds in force at the filing date.
4. Budget line items: Add the proposed filing fee (R220,000 for intermediate; R735,000 for large) to the transaction-cost waterfall. Include external competition counsel fees and internal resource allocation for preparation of the merger notification form.
5. Timeline planning: Build the competition filing timeline into the critical path. Allow 2–4 weeks for pre-notification, 20 business days for Phase 1 review (intermediate) or 40+ business days for Phase 2 (large), and a buffer for information requests.
6. Co-operation covenants: Ensure the sale agreement includes mutual obligations for each party to provide information, access and assistance required for the filing.
7. Monitor the Gazette: Assign a team member to monitor the Government Gazette for publication of the final determination confirming the effective date.

Drafting Merger Provisions and Conditionality, Sample Clauses and Negotiation Tips

In light of the South Africa merger threshold changes 2026 proposals, deal teams should revisit standard-form merger conditionality language. The following sample clauses are provided for illustration only, parties should seek tailored legal advice before adopting any template.

• Sample Clause 1, Adaptive Notifiability Condition. “This Agreement is subject to the condition precedent that, to the extent the Transaction constitutes a notifiable merger under the Competition Act as at the Filing Date (applying the thresholds in force on that date), the Competition Authorities shall have approved the Transaction, with or without conditions. In the event that the Transaction does not constitute a notifiable merger under the thresholds in force on the Filing Date, this condition shall be deemed to have been fulfilled.” This language prevents the condition from surviving where a threshold increase renders the deal non-notifiable.
• Sample Clause 2, Drop-Dead Date with Extension Mechanism. “If Competition Approval has not been obtained by [date] (the ‘Long-Stop Date’), either Party may terminate this Agreement by written notice. Provided that if the reason for the delay is attributable solely to the review process of the Competition Authorities, the Long-Stop Date shall automatically be extended by 30 (thirty) business days.” This gives deal teams breathing room without an indefinite open commitment.
• Sample Clause 3, Allocation of Filing Costs and Co-operation. “The Purchaser shall be responsible for the payment of all merger filing fees and shall prepare the notification in consultation with the Seller. The Seller shall, at its own cost, use reasonable endeavours to provide all information and documentation within its possession or control that is reasonably required for the notification within 10 (ten) business days of a written request.”

Negotiation tip: in a seller-friendly market, sellers may push for the purchaser to bear all competition risk (including fee increases and any remedies imposed). In a buyer-friendly market, consider allocating filing fees on a 50/50 basis or tying cost allocation to the cause of any delay.

Risk Allocation: Remedies if Filing Is Delayed or Blocked

Even after the Competition Act amendments 2026 reduce the total number of filings, the risk of delay or prohibition remains real for transactions that cross the new thresholds. Deal teams should build the following risk-mitigation mechanisms into their agreements:

• Termination right: Either party may terminate if the Competition Commission or Tribunal prohibits the merger or imposes conditions unacceptable to either party.
• Reverse break fee: The purchaser pays a specified fee if the transaction fails solely because competition clearance cannot be obtained, compensating the seller for transaction costs and market disruption.
• Interim preservation obligations: Require the target to operate in the ordinary course pending clearance, preserving value and preventing integration before approval.
• Warranties and indemnities: Seller warrants that it has disclosed all information material to the competition assessment; purchaser indemnifies seller against costs arising from information requests initiated by the Commission directed at the target.
• Regulatory remedy negotiation: Include a commitment to negotiate in good faith with the Commission on any proposed conditions or remedies before exercising termination rights.

For broader guidance on structuring commercial deals in South Africa, see our international commercial practice guide.

Where to Read the Draft, Submit Comments and Monitor Next Steps

Practitioners and interested parties can access the full text of the draft amendments in Government Gazette No. 54020 (GN 7029), published on 27 January 2026. The Competition Commission’s merger thresholds page provides background on the current regime and Commission practice.

Written comments must be submitted within 30 business days of publication. Submissions should be directed to the DTIC using the details set out in the Gazette notice. Once the comment period closes and the Minister publishes a final determination, the new thresholds and fees will take effect on the date specified in the final Gazette notice.

Counsel should subscribe to Gazette alerts and monitor leading South African competition law practitioners for real-time updates on the finalisation date.

Conclusion: Preparing for M&A South Africa 2026 and Beyond

The South Africa merger threshold changes 2026 proposals represent a significant recalibration of the competition merger control framework. For deal teams, the immediate priority is threefold: reassess notifiability for every live and pipeline transaction, update budgets to reflect the higher filing fees, and revise standard-form conditionality language to accommodate the possibility that thresholds shift between signing and filing. Firms that take these steps now will be well positioned to close deals efficiently once the final determination is published.

For further resources on selling a business in South Africa or navigating other international commercial transactions, explore our practice guides and connect with a qualified South African practitioner through the Global Law Experts directory.

Sources

1. South African Government, Gazette No. 54020 (GN 7029): Draft Amendments to Merger Thresholds (27 January 2026)
2. Competition Commission of South Africa, Merger Thresholds
3. Bowmans, Proposed Amendments to Merger Notification Thresholds and Fees (28 January 2026)
4. Cliffe Dekker Hofmeyr, Newsflash: Proposed Changes to Merger Thresholds (28 January 2026)
5. Werksmans Attorneys, Proposed Amendments to South Africa’s Merger Thresholds (28 January 2026)
6. DLA Piper Africa, Newsflash: Higher Merger Filing Thresholds and Increased Filing Fees (29 January 2026)
7. Webber Wentzel, Could the Proposed Merger Threshold Increase Lead to a More Efficient Merger Process?
8. Cox Yeats, Proposed Increase to Merger Notification Thresholds (29 January 2026)