The ACCC will not oppose the proposed acquisition of One Rail by
"Without the divestment of One Rail's east coast business, the ACCC considered that the proposed acquisition would reduce the number of main competitors in the supply of coal haulage in
"The divesture ensures that there will remain three main suppliers of coal haulage in
The ACCC also considered the impact of the proposed acquisition on competition in one or more regional markets for the supply of rail haulage services for bulk commodities, other than coal.
"We are also satisfied that the divestment of One Rail's east coast business would preserve it as a potential competitor to
Divestiture remedies generally involve the divestiture business being sold to a purchaser approved by the ACCC. In this case, the undertaking includes an option for the divesture to occur by demerging the east coast business as a new separate ASX-listed entity.
Divestitures of this type are not commonly accepted as a merger remedy as they present certain risks and complexities beyond a standard divestiture undertaking and therefore require careful scrutiny.
These risks largely arise from difficulties in assessing whether the proposed demerged business would become an effective, stand-alone and long-term competitor, such as to replace the competition that would otherwise be eliminated by a proposed acquisition.
"After thoroughly assessing these risks, and changes to the undertaking offered by
Following the acquisition,
Concerns were raised with the ACCC that One Rail's ownership of rail networks in
"Our merger assessment is limited to competition effects that are the result of the proposed acquisition and cannot address concerns with the existing rail industry or its regulation," Ms Cass-Gottlieb said.
"We are however satisfied that the transaction does not result in
Further information, including the undertaking accepted by the ACCC, can be found on the ACCC's public register:
In considering the proposed acquisition, the ACCC applies the legal test set out in section 50 of the Competition and Consumer Act. In general terms, section 50 prohibits acquisitions that would have the effect, or be likely to have the effect, of substantially lessening competition in any market. Background
One Rail is a provider of rail haulage and rail network services. It provides rail haulage services on the
Coal haulage typically refers to the movement of coal, by train, from mine site to port for export.
Bulk haulage refers to the movement by train of commodities or products such as iron ore, cement, bauxite, alumina, base metals, refined metals, grain, livestock, fertiliser or dangerous goods.
The ACCC will release a Public Competition Assessment in due course, which will explain its decision in greater detail. Release number: 91/22ACCC Infocentre:
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(C) 2022 M2 COMMUNICATIONS, source