ACCC to conduct market inquiries on undertakings relating to BG's proposed acquisition of Origin

The Australian Competition and Consumer Commission will conduct market inquiries on undertakings that have been offered by BG Group plc to address competition concerns arising from BG's proposed acquisition of Origin Energy Limited.

The undertakings propose that BG would unwind joint marketing arrangements between BG and Queensland Gas Company for the supply of gas to domestic wholesale customers in southern Queensland. The undertakings also contemplate that BG will relinquish its current right to appoint a director to the board of QGC and restructure arrangements between BG and QGC in relation to the exchange of commercially sensitive information, such that BG will not seek or obtain information in relation to the terms on which QGC supplies gas to domestic wholesale customers in southern Queensland.

"We strongly encourage market participants to consider the proposed section 87B undertakings and provide comments to the ACCC," ACCC Chairman, Mr Graeme Samuel, said.

The proposed undertakings will be available shortly on the ACCC's website at www.accc.gov.au/mergersregister.

The ACCC invites comment from interested parties by 26 August 2008. To allow for consultation on the proposed undertaking, the ACCC's final decision date will be deferred until 10 September 2008.  Submissions can be sent by email to the ACCC at: mergers@accc.gov.au.

Background

Section 87B of the Trade Practices Act 1974 states that the ACCC may accept a written undertaking in connection with a matter in relation to which the ACCC has a power or function under the Act, including section 50.

Undertakings given under section 87B are court-enforceable. Section 50 of the Act prohibits mergers and acquisitions that would have the effect, or be likely to have the effect, of substantially lessening competition in a market.