Xstrata Plc - proposed acquisition of Centennial Coal Company Ltd
Type of assessment
Informal Review
Reference
29321
Acquirer(s)
Xstrata Plc
Target(s)
Centennial Coal Company Ltd
Industry
Coal
Summary
Swiss resources group Xstrata plc is seeking to acquire assets of Centennial Coal Company Limited (Centennial).
Outcome of assessment
Not opposed
Total review days *
14
Commenced public review
17th September 2007
Date completed
5th October 2007
Market definition
The ACCC considered that the relevant markets are the national markets for the supply of:
- Thermal coal; and
- Metallurgical coal or coking coal.
Competition analysis
The ACCC considered that the proposed acquisition is unlikely to result in a substantial lessening of competition in national markets for the supply of thermal and metallurgical coal. Factors which led to this conclusion include:
- both parties export the majority of their coal;
- the market concentration of the merged entity would not be sufficient to raise competition concerns, as Centennial represents a small proportion of Australian production of thermal and metallurgical coal and the proposed acquisition would only marginally increase Xstrata's market share;
- there are sufficient alternative suppliers, including BHP and Rio Tinto; and
- countervailing pressure from the owners and operators of electricity utilities is likely to constrain the merged entity.
Review timeline
Date
Event
17th September 2007
ACCC commenced review under the Merger Review Process Guidelines.
2nd October 2007
Closing date for submissions from interested parties.
5th October 2007
ACCC announced it would not oppose the proposed acquisition.
* Total Review days = Total business days less public holidays and time during which the review was suspended.
