Amendment of the Small Merger Guidelines: What dealmakers need to know

Shawn van der Meulen, Clare-Alice Vertue and Mavin Jonkers at Webber Wentzel. (Image: AI-enhanced)

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On 14 August 2026, the Competition Commission (Commission) gazetted draft amendments to its Guidelines on Small Merger Notification (Small Merger Guidelines) and invited interested parties and stakeholders to submit written comments within 30 days of publication.

The only proposed change to the existing Small Merger Guidelines is the increase of the monetary thresholds. The proposed amendments stem from the increase in merger notification thresholds that came into force earlier this year. Because the existing Small Merger Guidelines benchmark their notification criteria against the regulated large merger thresholds, the upward revision of those thresholds earlier in the year necessitated corresponding changes to the Small Merger Guidelines. While the Commission's stated policy rationale centres on digital and technology acquisitions, the amended Small Merger Guidelines continue to apply to all small mergers regardless of the sector or industry in which the merging parties operate.

A merger is classified as a small merger where, based on the parties' most recent year-end financial statements, the combined value of the acquiring group together with the target firm (and any firms it controls) is less than ZAR 1 billion, and/or the value of the target firm is less than ZAR 200 million.

Small mergers do not require mandatory notification. However, in terms of section 13(3) of the Competition Act 89 of 1998 (the Act), the Commission may, within six months after a small merger has been implemented, require that it be notified and approved if, in the Commission's view, the merger may substantially prevent or lessen competition or cannot be justified on public interest grounds. Once a small merger has been called in, section 13(4) of the Act prohibits the parties from taking any further steps to implement it until it has been approved or conditionally approved.

Even though the Small Merger Guidelines are not binding, they identify specific circumstances in which the Commission expects merger parties to inform it of a small merger before implementation. These instances as set out in the guidelines are:

1. At the time of concluding the transaction, any of the merging parties (or firms within their respective groups) are subject to an investigation by the Commission in terms of Chapter 2 of the Act.
2. At the time of concluding the transaction, any of the merging parties (or firms within their respective groups) are respondents in pending proceedings before the Competition Tribunal instituted by the Commission in terms of Chapter 2 of the Act.
3. The acquiring firm’s annual turnover or asset value alone exceeds the combined turnover or asset threshold for a large merger, and either (i) the consideration for the acquisition exceeds the large merger target firm threshold, or (ii) although the consideration is below that threshold, it effectively values the target firm at or above the large merger target firm threshold.

As mentioned above, the substance of the 2022 Revised Small Merger Guidelines is retained. The change lies in the financial criteria. The Small Merger Guidelines indicate that the Commission is to be informed of all small mergers where the acquiring firm's turnover or asset value alone, without including the target firm, exceeds the large merger combined threshold, currently ZAR 9.5 billion (up from ZAR 6.6 billion), and at least one of the following criteria is met in respect of the target firm:

• The consideration for the acquisition or investment exceeds the target firm threshold for large mergers, currently ZAR 280 million (up from ZAR 190 million).
• The consideration for the acquisition of a part of the target firm effectively values the target firm at ZAR 280 million or more.

The Small Merger Guidelines restate the Commission's concern that potentially anti-competitive acquisitions in digital or technology markets may escape regulatory scrutiny because they take place at an early stage in the life of the target, before it has generated sufficient turnover or accumulated the capital and physical assets needed to trigger mandatory notification. This is particularly so where a target's valuation is high due to the prospective future value of its concept, technology, intellectual property or skills. This value is not recorded in its financial statements. In the Commission's view, such acquisitions may substantially prevent future competition with incumbents or lessen competition by strengthening the portfolios of dominant companies. It bears emphasis, however, that the financial criteria in the Small Merger Guidelines are not sector-specific. They apply to any small merger in any industry.

South Africa's approach forms part of a broader recalibration of African merger control regimes to the realities of the digital economy. At the regional level, COMESA's Competition and Consumer Protection Regulations, 2025 introduced a dedicated notification threshold for transactions in digital markets, expressly acknowledging that traditional turnover and asset thresholds may fail to capture acquisitions of innovative digital firms, start-ups and platform businesses whose competitive significance is not reflected in their revenues. This is a transaction-value based test deliberately designed to capture deals involving nascent digital targets.

For transacting parties with a multi-jurisdictional African footprint, the message developing is consistent across these two regimes: an acquisition of a digital or technology target firm will not fall below the regulatory radar simply because the target firm's turnover and asset values are modest.

The procedure for informing the Commission is unchanged: parties must write to the Mergers & Acquisitions Division with sufficient detail on the acquiring and target firms, the proposed transaction and the relevant markets. The Commission will respond in writing within 30 business days, indicating whether formal notification is required. Parties should factor this engagement period into their transaction timetables.

Two practical consequences are worth noting. First, the upward adjustment of the reference thresholds means that fewer small mergers will meet the criteria for pre-implementation engagement with the Commission, consistent with the broader intention behind the threshold increases to reduce the regulatory burden on smaller transactions. Second, the Small Merger Guidelines are directed at large acquirers (those whose turnover or assets alone exceed ZAR 9.5 billion). Large businesses and private equity firms active in early-stage investments should ensure their transaction screening processes reflect the updated monetary thresholds. This is particularly important when only a portion of the target is being acquired, as the Commission may assess whether the consideration paid effectively values the target firm at or above the large merger target firm threshold, even if the price for the partial interest itself falls below that threshold.

Notably, the Commission has not yet reported an increase in the notification of small mergers as a result of the 2022 Revised Small Merger Guidelines. 

The draft amendments are best understood as the second half of the recalibration that began with the May 2026 merger filing threshold increases. While fewer transactions require mandatory notification, the Commission is signalling that it intends to keep watch below the thresholds.