New Zealand’s competition and investment regimes are undergoing a significant reset.

At the end of 2025, the Government unveiled a suite of reforms to the Commerce Act, designed to modernise merger control and give the Commerce Commission more tools to intervene in anti‑competitive conduct. While not as far‑reaching as Australia’s mandatory notification regime introduced in January, the changes are significant and include clarifying key legal tests, addressing serial acquisitions, and introducing new powers for the Commission to intervene in potentially anti‑competitive acquisitions. These reforms reflect concerns about concentrated markets and are intended to ensure that New Zealand’s competition settings are fit for purpose.

The Overseas Investment Act is being reformed to streamline foreign investment by introducing a consolidated and risk‑based approach to screening for investments other than those in farmland, residential land or fishing quota. The test will apply a three‑stage national interest test. The reforms were enacted in January 2026 and expected to come into effect by April 2026.

Key changes to merger reform

The Commerce Act amendments include:

• Clarifying the SLC test: The “substantial lessening of competition” test will be refined to explicitly cover mergers that create, strengthen, or entrench market power, aligning with recent Australian reforms and extending to other provisions of the Act.
• Addressing serial acquisitions: The Commission will be able to assess the cumulative impact of acquisitions made over the previous three years, targeting roll‑up strategies that may escape scrutiny when viewed in isolation.
• Defining “substantial influence”: A non‑exhaustive list of factors will guide the Commission in determining whether one entity can exert substantial influence over another, for the purpose of merger assessments.
• Clarifying “assets of a business”: The definition will be expanded to include all forms of property and legal or equitable rights, clarifying the breadth of the definition.
• Accepting behavioural undertakings: The Commission will be empowered to accept behavioural remedies as a condition of clearance or authorisation, adding flexibility to the merger review process.

The Commission’s oversight powers will also be strengthened:

• Stay and hold powers: The Commission will be given the power to temporarily suspend the completion of a transaction for up to 40 working days while it investigates.
• Call‑in powers: The Commission can require parties to seek clearance for a transaction it believes may substantially lessen competition, effectively pausing the deal until a decision is made.
• Extended timeframes: For complex mergers, the Commission will have up to 100 additional working days (additional to the current 40 working day timeframe) to reach a decision.

Other Commerce Act reforms

The Government is also introducing reforms to other parts of the Commerce Act, including:

• Predatory pricing: a new statutory presumption will be introduced to define when below‑cost pricing by firms with market power is unlawful. In particular, pricing below Average Variable Cost (AVC) or Average Avoidable Cost (AAC) over a sustained period is presumptively unlawful. Pricing above AVC/AAC but below Long‑Run Average Incremental Cost (the average cost of producing an additional unit of output over the long‑term costs) or Average Total Cost (total costs divided by the number of units produced) over a sustained period will be presumptively unlawful only where there is evidence of exclusionary intent. The Government has clarified that short‑term promotional pricing is not intended to be caught by the new test.
• AI and algorithmic conduct: The Act will be amended to confirm that conduct facilitated by AI or algorithmic tools is subject to the same prohibitions as human‑led behaviour.
• Collaborations and exemptions: A statutory notification regime will be introduced for resale price maintenance and small business collective bargaining, alongside class exemptions for low‑risk collaborations. A more streamlined process for collaborative activity clearances will also be introduced.

Implications for M&A

The reforms signal a shift toward more active scrutiny of merger activity, particularly in sectors where market concentration is already high. Roll‑up strategies and serial acquisitions, especially in industries like banking, grocery, and electricity, are likely to attract closer attention from the Commerce Commission. Firms pursuing these strategies should plan carefully and be prepared to justify how their deals will not harm competition, even if individual transactions appear small or incremental.

The introduction of behavioural undertakings adds a layer of flexibility to the merger clearance process, allowing parties to offer commitments around future conduct. However, these undertakings are not a silver bullet. Regulators in other jurisdictions have been cautious in accepting behavioural remedies, particularly where structural issues are at play. Parties should not assume that offering behavioural commitments will automatically resolve competition concerns.

Finally, some deal timelines may lengthen if the Commission exercises its new pause or call‑in powers. While there is already constructive engagement between the Commission and merging parties, and most parties cooperate when the Commission requests additional time to investigate a merger or clearance is encouraged, we anticipate the introduction of these powers will lead to more intervention by the Commission. Parties should factor this into their deal timelines and consider approaching the Commission earlier to reduce the risk of delays to completion should the Commission require the acquirer to file a clearance application.

Firms with existing market power should expect heightened scrutiny: not only of their acquisitions but also of their broader conduct in the market.

Overseas investment reform

The reform seeks to change the Overseas Investment Act’s core principle, which is that it is a privilege to own or control sensitive assets in New Zealand, to one which takes a more balanced approach. This new approach now formally recognises the role of overseas investment in increasing economic opportunity by enabling the timely consent of less sensitive investments through an initial national interest risk assessment.

The focus of the regime has been changed so that lower risk investments can get faster approval, and higher risk investments or those in more sensitive assets, get more regulatory attention.

This purpose is brought into effect by the introduction of a fast‑track consenting process for transactions other than those relating to residential land, farmland, and fishing quota (being more sensitive assets). That fast‑track process is assessed on a national interest basis (i.e. if there is no risk to New Zealand’s national interest, the transaction should be approved). The reform should therefore result in a far more efficient process for most investments and should help to shift the current perception that investing in New Zealand is difficult.

The current regime

Greater detail on the current regime is available in our Doing Business in New Zealand Guide available here. In summary, if an investment is being made into ‘significant business assets’ (essentially into businesses that have $100m of New Zealand assets) or ‘sensitive land’, consent is required from the Overseas Investment Office (OIO).

Significant business asset consent must satisfy an investor test (essentially that certain crimes have not been committed). Sensitive land consents must also satisfy a benefit to New Zealand test (essentially that the overseas investment will, or is likely to, benefit New Zealand (or any part of it or group of New Zealanders) by reference to certain factors e.g. economic development, benefit to natural environment etc). For residential land, certain special tests can be satisfied in the alternative. Finally, if there is foreign government involvement or the investment involves certain strategically important businesses, a national interest assessment is required.

That consent process can take from 35 working days for significant business assets (increased to 55 working days for national interest assessments), to 70 working days for sensitive land with farmland taking up to 100 working days. That said, the OIO has been directed to process 80% of applications within half the prescribed timeframe, which it has been achieving. Further, applications relating purely to residential land have much shorter application timeframes, but these are generally not relevant for M&A as other categories tend to be triggered.

The new regime

The reforms will remove from the above processes, investments that do not relate to residential land, farmland, and fishing quota. Instead, for those transactions, a new three‑stage modified national interest test will apply and this is explained below.

Much of the new assessments of national interest will be by reference to factors set out in legislation, but also in Ministerial Directive Letters. These collectively set out the risks and factors the OIO will consider. It is likely that they will remain of a fairly broad nature as is currently the case for national interest assessments of investments by foreign governments or into strategically important businesses.

Consequently, for transactions that entail a higher degree of national interest risk, there is the potential for a greater degree of political influence which will need to be factored in.

The new process