AGL sought to acquire Sun Retail, which was being sold as part of tender process being conducted by the Queensland Government.
Outcome of assessment
Not opposed
Total review days *
24
Commenced public review
24th August 2006
Date completed
26th September 2006
Competition analysis
Gas and / or Electricity
The acquisition would have resulted in AGL becoming the largest retailer of electricity in Australia. Nevertheless, the ACCC considered that evidence of customer churn in energy retailing from other states and the presence of other retailers in the market were indicators that there would be likely to be sufficient competitive constraints acting on the merged entity.
The ACCC also noted that the purchaser of another Queensland electricity retailer, PowerDirect, which was being sold after Sun Retail, was also likely to provide significant competition for the merged entity.
As such, the ACCC considered it was unlikely that the proposed acquisition would have resulted in a substantial lessening of competition.
LPG
AGL proposed to acquire Sun Retail and then on-sell Sun Retail's LPG business to Elgas. The ACCC conducted a separate analysis of Elgas' proposed acquisition of the LPG business and came to the conclusion that the proposed acquisition would not be likely to result in an SLC. This analysis is available on the ACCC's Mergers website.
Given that AGL only had a 50% interest in Elgas, AGL's proposed acquisition was even less likely to raise competition concerns than Elgas' proposed acquisition of Sun Retail's LPG business.
Review timeline
Date
Event
24th August 2006
ACCC commenced review under the Merger Review Process Guidelines. Market inquiries commence
6th September 2006
Closing date for submissions from interested parties
26th September 2006
ACCC decided not to oppose the proposed acquisition
* Total Review days = Total business days less public holidays and time during which the review was Suspended.
