The Australian Competition and Consumer Commission will not intervene in the proposed acquisition of Finemore Holdings Limited by Toll Holdings Limited, ACCC Chairman, Professor Allan Fels, said today.
Toll and Finemores are providers of transport and logistics services. They operate across a broad range of transport segments, including refrigerated transport, bulk liquid transport, car carrying, petroleum transport and general freight. In logistics, they provide warehousing, tracking and inventory control.
The ACCC conducted extensive market inquiries covering customers as well as competitors. It found that there are a large number of small operators providing transport and logistics services but a relatively small number of large, national providers. For example, it is estimated that there are around 40,000 transport providers and of that roughly 70 per cent operate a single vehicle. While the merger proposal will result in further concentration at the top tier of providers, there was very little concern among competitors and customers as to the potential lessening of competition as a result of the merger.
"The ACCC found that competition among transport and logistics providers is fierce. The reasons for this include the relatively low barriers to small-scale entry and the countervailing power that resides with customers. For example, large customers control substantial volumes of business as well as the option of providing transport and logistics services in-house rather than contract them out. Small customers do not require the sophisticated logistics services provided by the top tier providers and have access to a large number of small providers", Professor Fels said.
The ACCC has decided that the acquisition of Finemores by Toll is unlikely to result in a substantial lessening of competition in any Australian market and therefore does not intend to intervene in the acquisition.