The Australian Competition and Consumer Commission has accepted revised court-enforceable undertakings from Toll in relation to its proposed acquisition of Patrick Corporation, ACCC Chairman, Mr Graeme Samuel, said today.
As a consequence the ACCC proposes to withdraw its opposition to the acquisition. Toll has agreed to pay the ACCC’s legal costs.
"The undertakings offered by Toll address the competition concerns arising from Toll's proposed acquisition of Patrick", Mr Samuel said. "The undertakings are far more extensive than previously offered. After taking into account all of the divestments and commitments now offered by Toll, the ACCC determined that the proposed acquisition would be unlikely to breach section 50 of the Trade Practices Act.
"In the process of its examination of this merger, the ACCC took into consideration information and submissions made by many participants in the transport industry, including customers, competitors and industry bodies. The ACCC also took into consideration recent comments from market participants relating to Toll's offer of undertakings made to the Federal Court on 1 March 2006. Toll made that offer to the court as part of Toll's defence to the ACCC's section 50 action against Toll which the ACCC filed on 9 February 2006.
"The signed final undertakings are a significant improvement on the undertakings offered to the court by Toll", Mr Samuel said. "Toll must divest 50 per cent of the shares in Pacific National, Patrick's Bass Strait operations, Patrick or Toll's vehicle logistics operations and the Minto terminal. However, the ACCC has also received extensive further commitments from Toll.
"In particular, there are commitments that will assist a new rail line haul competitor commence east-west rail freight services in competition with Pacific National, and commitments that prevent Pacific National from favouring Toll's downstream interests. Toll is also undertaking not to utilise control of Patrick's port operations to discriminate in favour of its own land-side logistics operations. In addition, the ACCC considers that, compared to the earlier offers of undertakings by Toll, the final signed undertakings offer a higher level of certainty that competitive detriment will not occur.
"The offer by Toll to divest 50 per cent of Pacific National shares significantly altered the ACCC's assessment of the competition concerns relating to the rail industry. This was first offered by Toll in the undertaking lodged in the Federal Court on 1 March 2006.
"In light of the 50 per cent divestment and Toll's behavioural undertakings not to discriminate against competitors, the ACCC believes that Toll will not be able to operate Pacific National in a way that unfairly favours its own interests.
The signed undertakings will be available on the ACCC’s website by following the link to Public registers and then the link to Undertakings register (s. 87B).
A Public Competition Assessment detailing the reasons for the ACCC’s decision will also be available on the ACCC's website in due course.