New merger thresholds set to ease business transactions

By Jessie Taylor

South Africa’s competition law landscape has undergone one of its most significant updates in nearly a decade, with new merger notification thresholds taking effect from 1 May. The changes are designed to reduce regulatory burdens on smaller transactions, improve efficiency within the competition regulatory framework and support a more investment-friendly business environment.

The revised thresholds represent an important legal and economic development. While the Competition Commission will continue to scrutinise mergers that could substantially affect competition or public interest outcomes, the new framework seeks to ensure that regulatory resources are focused on larger, more complex transactions where oversight is most needed.

Updating figures to account for inflation, economic growth and changing markets

The amendments were introduced by the Minister of Trade, Industry and Competition following consultation with the Competition Commission and industry stakeholders. The revised thresholds replace figures that had remained largely unchanged since 2017, despite years of inflation, economic growth and changing market conditions.

According to the Competition Commission, the previous thresholds had gradually captured an increasing number of smaller transactions that posed little risk to competition. This resulted in additional compliance costs, filing fees and approval delays for businesses undertaking mergers and acquisitions. The revised framework aims to address this challenge by ensuring that only transactions above higher financial thresholds require mandatory notification.

Under the new rules, an intermediate merger must now be notified when the combined annual turnover or asset value of the acquiring and target firms equals or exceeds R1-billion, while the target firm’s turnover or asset value must be at least R200-million.

Previously, these thresholds stood at R600-million and R100-million, respectively. For large mergers, the combined turnover or asset value threshold has increased from R6.6-billion to R9.5-billion, while the target firm’s threshold has risen from R190-million to R280-million.

These adjustments are expected to remove a substantial number of smaller and mid-market transactions from the mandatory notification process. As a result, businesses may experience reduced transaction costs and shorter timelines when pursuing acquisitions, partnerships or strategic restructuring initiatives. This is particularly relevant for small and medium-sized enterprises seeking growth opportunities in an increasingly competitive economic environment.

Continued competition oversight

Importantly, the amendments do not eliminate competition oversight. The Competition Act continues to empower the Competition Commission to investigate and, where necessary, require notification of small mergers that may raise competition or public interest concerns. Parties may also voluntarily notify transactions that fall below the thresholds if they believe regulatory certainty would be beneficial.

The changes form part of a broader effort to modernise South Africa’s regulatory framework and create conditions that support investment and economic growth. By reducing unnecessary administrative requirements, regulators hope to encourage business activity while maintaining appropriate safeguards against anti-competitive conduct.

The revised framework also aligns with broader government efforts to improve the ease of doing business in South Africa. For investors, certainty and efficiency are important considerations when evaluating opportunities. A merger control system that focuses resources on higher-risk transactions can contribute to a more predictable and effective regulatory environment.

Alongside the new thresholds, filing fees for mergers requiring notification have also increased. The filing fee for intermediate mergers has risen from R165 000 to R220 000, while the fee for large mergers has increased from R550 000 to R735 000. Although the higher fees may increase costs for larger transactions, the overall impact is expected to be offset by the fact that fewer transactions will require mandatory notification.

Another notable aspect of the amendments is their retrospective application. The revised thresholds took effect from 1 May 2026, meaning that transactions entered into before this date but not yet notified must be assessed against the new thresholds. Organisations currently involved in mergers or acquisitions should therefore seek legal advice to determine whether their transactions remain notifiable under the revised framework.

The amendments arrive at a time when South Africa is seeking to stimulate investment, support business confidence and drive economic recovery. Effective competition regulation plays a critical role in balancing these objectives. On the one hand, regulators must safeguard competitive markets and protect consumers. On the other hand, they must avoid imposing unnecessary administrative burdens that may discourage investment or delay beneficial business transactions.

The revised merger thresholds reflect an effort to strike this balance. By focusing regulatory attention on transactions with the greatest potential impact on competition and public-interest outcomes, the Competition Commission can deploy its resources more effectively while enabling lower-risk transactions to proceed with greater efficiency.