How to Draft Joint Venture Agreements in Australia After the 2026 ACCC Merger Reforms, a Practical Checklist for Dealmakers

From 1 January 2026, Australia’s mandatory, suspensory merger notification regime fundamentally changed the way deal teams structure and document joint ventures. Any party forming, expanding or restructuring a joint venture agreement in Australia must now assess whether the transaction triggers a mandatory notification to the Australian Competition and Consumer Commission (ACCC), and must wait for clearance before completing. The ACCC’s updated merger reform FAQs, published on 24 April 2026, clarified key procedural questions around thresholds, review windows and waiver mechanics, yet significant drafting risks remain for in-house counsel and advisers who have not recalibrated their standard JV precedents.

This guide provides a clause-by-clause drafting checklist that maps JV governance structures directly to ACCC merger control risk, equipping general counsel, CFOs, private equity sponsors and developer deal teams with the practical tools they need right now.

Read this guide if you are:

• Forming a new incorporated or unincorporated JV in Australia
• Restructuring an existing JV (step-ups, options, call/put exercises)
• Negotiating deadlock, exit or insolvency provisions that could transfer control
• Advising on automotive dealership networks, franchise systems or infrastructure JVs
• Evaluating whether a live deal requires ACCC notification before completion

Do Joint Ventures Need ACCC Notification? A Quick Decision Checklist

Under the ACCC’s mandatory merger notification regime, certain acquisitions of shares, assets or rights must be notified before completion. A joint venture can constitute a notifiable acquisition when the formation, restructuring or transfer of interests gives one party decisive influence or control over the JV entity or its assets, and the relevant turnover or transaction-value thresholds are met. The ACCC’s thresholds guidance confirms that combined Australian turnover, transaction value and asset value are the primary metrics for determining whether notification is mandatory.

Can a Joint Venture Be a Merger?

In competition law terms, the formation of a joint venture can be treated as an acquisition. Where one party acquires shares, units or assets from another, or where the JV structure confers the ability to exercise decisive influence over the target business, the ACCC may treat the transaction as functionally equivalent to a merger. This is true even where both parties characterise the arrangement commercially as a “partnership” or a “collaboration.” Industry observers expect this interpretive approach to capture a broader range of JV formations than many deal teams initially anticipated.

Six-Step Notification Decision Checklist

1. Identify all parties and their existing Australian operations. Map each party’s current market presence, turnover and asset base in Australia.
2. Identify what is being transferred or acquired. Shares, units, assets, contractual rights, intellectual property, customer lists or exclusive territories, each can constitute an “acquisition” for notification purposes.
3. Calculate combined Australian turnover. Apply the ACCC’s turnover thresholds to the acquiring party and the target (or the JV vehicle) based on the most recent financial year.
4. Assess whether decisive influence or control is conferred. Review governance rights, board composition, reserved matters, vetoes and information rights to determine whether the arrangement gives one party the ability to materially influence the JV’s strategic commercial behaviour.
5. Map contingent events. Options, calls, puts, step-ups, earn-outs and milestone-based transfers can each constitute a separate notifiable acquisition on exercise or vesting.
6. Apply the threshold tests. If the combined turnover, transaction value or asset value meets ACCC thresholds, notification is mandatory and completion must be suspended until clearance is obtained.

Worked Examples, Notification Risk by Scenario

Control Tests and Threshold Triggers, How JV Structures Map to ACCC Merger Control Risk

The ACCC’s notification framework focuses on whether a transaction confers the ability to exercise decisive influence over a business or its assets. For joint ventures, this analysis extends well beyond simple majority shareholding. Board composition, reserved-matter vetoes, information-access covenants and even contractual exclusivity arrangements can all be relevant when assessing whether the merger notification thresholds are triggered.

Understanding the Control Tests

Three primary forms of control are relevant to JV governance in Australia under the reformed regime:

• Share or unit acquisition. Acquiring shares or units that confer voting control or the ability to block strategic decisions.
• Asset or rights acquisition. Taking ownership or control of assets, customer contracts, exclusive distribution rights or intellectual property that constitutes a substantial part of a business.
• Decisive influence. Where governance provisions, even short of majority ownership, give one party the practical ability to determine the JV’s competitive conduct (pricing, output, market entry, capital expenditure).

Merger Notification Thresholds

The ACCC’s thresholds for notifying acquisitions are structured around combined Australian turnover, transaction value and asset value. Parties must assess these metrics at the time of each relevant acquisition event, including at the point of formation, at each step-up, and on exercise of any option or contingent right. The thresholds guidance published by the ACCC provides the current numerical benchmarks and calculation methodology.

Reporting Obligations by JV Form

Core Drafting Checklist for a Joint Venture Agreement in Australia

Every joint venture agreement in Australia should now be drafted, or reviewed, with ACCC notification risk as a standing item on the checklist. The clauses below represent the core provisions where drafting choices directly affect whether a transaction triggers mandatory merger notification, and how efficiently the parties can navigate the suspensory waiting period if notification is required.

Governance and Voting Rights

Board composition and voting thresholds are the first indicators of control. Where one party holds board appointment rights that give it a casting vote or effective veto over strategic decisions, the ACCC may treat that party as having decisive influence. Drafting considerations include:

• Specify equal board representation where genuine joint control is intended (e.g., two nominees each, independent chair for tie-breaking).
• Avoid granting one party a unilateral right to appoint a majority of directors unless notification has been assessed.
• Define “strategic decisions” and “ordinary course” clearly, ambiguity in reserved-matter lists can inadvertently expand one party’s de facto control.

Reserved Matters and Vetoes

Reserved-matter clauses are standard in JV agreements but carry underappreciated ACCC risk. If one party holds a veto over pricing, capital expenditure, market entry, material contracts or competitive conduct, the ACCC may find that party exercises decisive influence, even where its shareholding is at or below 50 per cent.

• Limit vetoes to genuinely protective matters (constitutional changes, related-party transactions, wind-up).
• Avoid granting vetoes over day-to-day pricing, output volumes or customer allocation.
• Include a schedule of reserved matters and review it against the ACCC’s guidance on decisive influence before execution.

Deadlock Clauses, Types and Trade-Offs

A deadlock clause in a joint venture can itself create a notifiable acquisition if the resolution mechanism results in a transfer of shares, assets or control from one party to the other. This is one of the most commonly overlooked ACCC risk points in existing JV precedents. The likely practical effect of the reforms is that many standard deadlock buy-sell provisions will need to be restructured or made conditional on ACCC clearance.

• Prefer non-transfer resolution mechanisms as the first steps in the deadlock escalation ladder (mediation, expert determination, independent chair).
• If buy-sell or shotgun mechanics are included, make the transfer conditional on ACCC clearance where thresholds are met.
• Include a fallback dissolution or winding-up provision as the final step, this avoids a forced transfer that could be treated as an acquisition.

Step-Ups, Options, Call/Put Mechanics

Any provision that allows one party to increase its shareholding, acquire additional assets or assume greater control, whether through a call option, put option, milestone-based step-up or automatic vesting, must be assessed at the drafting stage for ACCC notification risk. Early indications suggest the ACCC will treat the exercise of such rights as a separate acquisition event, requiring its own notification and clearance if thresholds are met at that time.

• Include a condition precedent requiring ACCC clearance before any step-up or option exercise that would change the balance of control.
• Stagger vesting milestones so that no single event crosses the threshold from minority interest to decisive influence.
• Draft “ACCC notification cooperation” covenants requiring both parties to assist with the notification process, share information and bear agreed costs.

Exit Rights

Pre-emption rights, tag-along and drag-along provisions, and contractual put/call exit mechanics all have the potential to create notifiable acquisitions. When one party exits and the other acquires the departing party’s interest, particularly where that acquisition consolidates control, the transaction should be mapped against ACCC thresholds at the time of exercise.

• Build in ACCC clearance as a condition to any compulsory acquisition on exit.
• Include a “regulatory delay” extension to transfer completion timelines to accommodate the ACCC review period.
• Consider whether a third-party sale process (rather than inter-party transfer) would avoid triggering notification altogether.

Information-Sharing and Compliance Covenants

Post-formation, JV partners will need to monitor ongoing compliance with ACCC merger control rules, particularly where the JV’s turnover grows over time or where incremental changes to governance rights are agreed. Practical clauses include:

• Annual or event-driven compliance assessments against current ACCC thresholds.
• Covenants requiring each party to notify the other if its Australian turnover changes materially.
• Information-sharing protocols that are competition-law compliant, avoid exchanging competitively sensitive data between the JV parties’ broader businesses.

Insolvency and Material Adverse Change Clauses

Insolvency events are a common trigger for automatic share transfers, put/call rights or forced buy-outs in JV agreements. Where a party enters voluntary administration, liquidation or receivership, and the JV agreement provides for the solvent party to acquire the insolvent party’s interest, that transfer may constitute a notifiable acquisition.

• Replace automatic insolvency buy-out clauses with a right (not obligation) to acquire, subject to ACCC clearance.
• Include standstill provisions that preserve the status quo during insolvency without transferring control.
• Draft MAC clauses that give the non-affected party information and negotiation rights, rather than automatic transfer rights.

Anti-Avoidance and Cooperation with the ACCC

The ACCC has signalled that it will scrutinise arrangements designed to circumvent mandatory notification. Drafting a joint venture agreement in Australia with artificial structural features intended to stay below thresholds, or splitting a single commercial arrangement into multiple sub-threshold transactions, is likely to attract regulatory attention.

• Include a mutual covenant that neither party will structure ancillary arrangements to avoid notification obligations.
• Document the commercial rationale for the chosen JV structure contemporaneously.
• Agree on which party will lead the ACCC notification process and how costs will be allocated.

Deadlock Resolution, Practical Clauses and Sequences

Deadlock resolution is one of the most negotiated provisions in any joint venture agreement in Australia, and the 2026 ACCC reforms have added a new layer of complexity. Deal teams must now design escalation ladders that resolve genuine commercial impasses without inadvertently creating notifiable acquisitions at each rung.

The Escalation Ladder

Best practice is to structure deadlock resolution as a multi-step escalation, beginning with non-transfer mechanisms and reserving ownership-changing remedies for the final stage:

1. Senior executive negotiation. Refer the dispute to nominated senior officers (CEO or equivalent) for resolution within a fixed period (typically 10–20 business days).
2. Mediation. Engage an accredited mediator under agreed institutional rules. Mediation preserves the relationship and avoids ACCC risk entirely.
3. Expert determination. For technical or valuation disputes, appoint an independent expert whose determination is binding. No transfer of shares or assets occurs.
4. Independent chair or casting vote. Appoint a pre-agreed independent director whose casting vote breaks the deadlock at board level without changing ownership.
5. Buy-sell / shotgun mechanics (conditional on ACCC clearance). As the final step, one party may trigger a buy-sell mechanism, but completion must be conditional on ACCC notification and clearance if thresholds are met at that time.

Deadlock Resolution, Pros, Cons and ACCC Risk

Drafting tip: Where a buy-sell mechanism is commercially essential, include a clause providing that the buy-sell notice triggers an obligation on both parties to cooperate with an ACCC notification (if required), and that the transfer completion date is extended by the length of the ACCC review period. This preserves the commercial intent while managing regulatory risk.

Managing Staged Investments, Step-Ups, Earn-Outs and Milestones

Staged investment structures are common in infrastructure, energy, automotive and franchise joint ventures. A party may enter at 25 per cent, with contractual rights to increase to 51 per cent on achievement of revenue milestones, financing close or project approvals. Under the 2026 ACCC merger control regime, each step-up that crosses a control threshold can constitute a separate notifiable acquisition.

Key Drafting Tactics

• Map each step-up event against ACCC thresholds at the outset. Model projected turnover and asset values at each vesting date and identify which events are likely to trigger notification.
• Build ACCC clearance into conditional transfer provisions. Draft each option or step-up right as conditional on ACCC notification and clearance if, at the time of exercise, the relevant thresholds are met.
• Stagger vesting to avoid single-event control shifts. Where possible, structure milestones so that no single step-up moves the acquiring party from a passive minority interest to decisive influence in one transaction.
• Include a “regulatory condition” carve-out in milestone deadlines. Extend milestone-achievement dates by the length of any ACCC review period to avoid contractual default caused by regulatory delay.
• Pre-notification strategy. For high-value staged investments, consider engaging the ACCC in a pre-notification discussion to identify potential issues early and reduce the risk of a protracted review when the step-up is triggered.

Model clause excerpt: “The Buyer’s obligation to complete the Step-Up Acquisition is conditional upon the ACCC having issued a clearance decision (or the applicable review period having expired without the ACCC issuing a notice of opposition) in respect of the Step-Up Acquisition. If ACCC clearance is required but has not been obtained by the Long-Stop Date, either party may terminate the Step-Up Notice by written notice to the other.”

Timelines, Suspensory Effect, Waivers and Penalties, Practical Steps for Joint Venture Deal Teams

The suspensory nature of the 2026 regime means that parties to a notifiable acquisition must not complete the transaction until the ACCC has issued clearance. The ACCC’s merger reform FAQs, dated 24 April 2026, confirm the procedural review timeframes and the process for seeking waivers in urgent or borderline cases. For joint venture deal teams, this has immediate commercial implications for signing-to-completion timelines, financing conditions and third-party approvals.

Practical Action Checklist, ACCC Notification Process

1. Pre-notification engagement. Contact the ACCC’s mergers team early, particularly for complex JV structures, staged investments or transactions with novel market-definition issues.
2. Prepare the notification filing. Gather all required information including party details, transaction structure, market information, competitive-overlap analysis and details of any ancillary arrangements.
3. Suspend completion. Do not complete the acquisition (including share transfers, option exercises or control transfers) until clearance is obtained. Use escrow arrangements for funds if commercial urgency requires early financial commitment.
4. Seek a waiver if appropriate. Where the transaction is borderline or commercially urgent, apply for a waiver from the notification requirement. The ACCC’s FAQ guidance sets out the waiver process and the information the ACCC expects to receive.
5. Monitor for interim orders. The ACCC can impose interim orders during the review period. Factor this risk into the JV agreement’s conditions-precedent framework.

Penalties for Non-Compliance

Failing to notify a notifiable acquisition, or completing before clearance (known as “gun-jumping”), exposes parties to serious consequences. The ACCC can seek injunctions to prevent or unwind the transaction, divestiture or structural remedies, and civil penalties. The financial and reputational cost of non-compliance far exceeds the administrative burden of a timely notification.

Sector Worked Examples, Automotive Dealer JV and Franchise JV

The ACCC’s mandatory merger notification regime affects joint ventures across all sectors, but two common structures, automotive dealership JVs and franchise network JVs, illustrate particularly important drafting challenges.

Automotive Joint Ventures, Dealership Networks

Fact pattern: Two regional automotive dealer groups form an incorporated JV to operate a shared parts distribution centre and co-brand a network of service locations. Each party contributes dealership assets (customer databases, workshop equipment, real property leases) and takes a 50 per cent shareholding. Combined Australian turnover exceeds ACCC thresholds.

Notification risk analysis: The share acquisition and asset contribution each confer joint control. The exclusive territory allocation and customer-database sharing create additional decisive-influence indicators. ACCC notification is likely required before completion.

Recommended drafting points:

• Include ACCC clearance as a condition precedent to completion of asset contributions and share allotments.
• Limit territory exclusivity to the minimum necessary, avoid blanket exclusive distribution that could be characterised as an acquisition of market access.
• Draft deadlock resolution without automatic buy-sell; prefer independent expert determination for operational disputes and conditional buy-sell for fundamental disagreements.
• Include annual compliance reviews mapping the JV’s growing turnover against current ACCC thresholds.

Franchise Joint Ventures, Master Franchise Structures

Fact pattern: A franchisor enters a JV with a local operator to expand a food-service franchise network across two Australian states. The JV vehicle holds the master franchise rights; the franchisor retains brand control and a 40 per cent interest with step-up options to 60 per cent on revenue milestones. Combined turnover is below thresholds at formation but projected to exceed them within 18 months.

Notification risk analysis: At formation, thresholds are not met, no notification required. However, the step-up option to 60 per cent will confer decisive influence when exercised, and by that time combined turnover is projected to exceed thresholds. The option exercise will itself be a notifiable acquisition.

Recommended drafting points:

• Draft the step-up option as conditional on ACCC clearance if thresholds are met at the date of exercise.
• Include a “regulatory condition” extension to milestone deadlines.
• Ensure the master franchise rights granted to the JV do not themselves constitute an acquisition of decisive influence over the franchisor’s broader Australian business.
• Build in a pre-notification covenant requiring both parties to commence ACCC engagement at least 60 days before the projected step-up date.

Conclusion, Next Steps for Joint Venture Deal Teams in Australia

The 2026 ACCC merger reforms have permanently altered the risk landscape for every joint venture agreement in Australia. Deal teams that continue to use pre-reform JV precedents, particularly those with standard deadlock buy-sell provisions, automatic insolvency buy-outs or unconditional step-up options, face material notification, enforcement and penalty risk. The practical response is clear: review every live and pipeline JV against the ACCC’s current thresholds, restructure control and exit provisions to include ACCC clearance conditions, and engage with the ACCC early through pre-notification discussions where the transaction is complex or borderline.

By building ACCC merger control compliance into the joint venture agreement at the drafting stage, parties protect both the commercial objectives of the JV and their regulatory standing in an environment where mandatory notification is now the default.

Sources

1. Australian Competition & Consumer Commission (ACCC), Mergers & Acquisitions Overview
2. ACCC, Thresholds for Notifying Acquisitions
3. ACCC, Merger Reform FAQs (24 April 2026)
4. Hamilton Locke, Navigating the ACCC’s New Merger Control Regime
5. Gadens, Australian Mandatory Merger Control: Key Implications
6. MergerFilers, Australia Country Guide
7. Gilbert + Tobin, Competition Law Treatment of Joint Ventures