What early childhood providers need to know about mandatory merger clearance in 2026

As Australia enters 2026, one of the most significant competition law changes in decades will come into effect, and early childhood education and care (ECEC) providers should be aware of what it means for the sector. From 1 January 2026, a mandatory, suspensory merger clearance regime will require certain large business acquisitions to be reviewed and approved by the Australian Competition and Consumer Commission (ACCC) before they can proceed.

While most small and medium enterprises (SMEs), including many childcare and early learning services, will not be directly captured by the notification thresholds, the reform is designed to strengthen competition, protect local markets and give smaller providers greater certainty when navigating an increasingly commercialised marketplace.

Under the existing system, most mergers and acquisitions were subject to a voluntary notification process, meaning businesses could complete transactions and later seek clearance from the ACCC, or risk enforcement action if the regulator considered the deal anti‑competitive.

From 1 January 2026, the Treasury Laws Amendment (Mergers and Acquisitions Reform) Act 2024 (Cth)introduces a compulsory notification requirement for larger deals. This represents the most substantial change to Australia’s merger laws in more than 50 years.

Under the new regime:

• Businesses proposing to acquire shares or assets above certain thresholds must notify the ACCC before completing the transaction.
• The ACCC will assess whether the proposed merger would substantially lessen competition in any relevant market.
• If the regulator does not grant clearance, the acquisition cannot legally be completed.

This framework aims to prevent rapid consolidation of market power that may disadvantage smaller operators, reduce choice for families or diminish service quality in local communities.

Although most childcare providers will not meet the ACCC’s notification thresholds, the indirect benefits of the new regime are meaningful for smaller operators, including:

• Greater negotiating certainty when engaging with larger providers, investors or potential acquirers.
• Reduced risk of sudden market consolidation that can narrow options for families and providers alike.
• Stronger competition protections, particularly in regional and urban markets where a handful of large networks may seek to expand rapidly.

For larger corporate operators or multi‑site groups considering strategic acquisitions, early engagement with the ACCC and specialist legal or competition advice will be essential to ensure compliance with the new rules.

Under the mandatory merger clearance regime:

• The ACCC will determine whether a proposed acquisition is likely to reduce competition to the detriment of consumers or small business rivals.
• Assessments will consider the structure of the relevant markets, the competitive constraints that remain and the likely impact on pricing, quality, innovation and choice.
• The clearance process must be completed before the transaction is settled, a significant shift from the previous voluntary notification system.

Providers outside the direct scope of mandatory notification should still monitor mergers in their regions and sectors, as clearance decisions can set important competitive precedents.

While not all ECEC providers will need to notify the ACCC themselves, there are practical reasons to understand the reform:

• Board and leadership planning: Boards should be aware of emerging trends in sector consolidation and competition law.
• Service strategy: Understanding when and how the ACCC intervenes can inform decisions about partnerships, joint ventures or formal collaborations.
• Risk management: Services can better anticipate how changes in local markets may affect staffing, funding negotiations or family choice.

This reform aligns with broader efforts to ensure that competition law supports diverse service ecosystems, particularly in sectors, like childcare, where community access and small provider viability are core to sector health.

To explore the reform in full, including specific thresholds and notification procedures, visit the NSW Small Business Commission guide to 2026 reforms.