ABC Learning Centres Limited has provided a court-enforceable undertaking to divest seven long day childcare centres in five regional areas, mainly in Queensland, to address Australian Competition and Consumer Commission concerns about ABC's acquisition of Hutchison's Child Care Services Ltd.
"The ACCC considers that this undertaking is necessary to ensure that prices for long day childcare services in these areas do not rise as a result of the merger and that, in particular, parents in regional areas continue to have a choice of long day childcare services for their children", ACCC Chairman, Mr Graeme Samuel, said today.
Consistent with its assessments of previous childcare acquisitions, the ACCC recognised that the competition effects of the proposed acquisition were more likely to be felt in local areas.
The ACCC conducted a comprehensive consultation process in order to assist its assessment of the proposed transaction and has determined that, subject to the divestitures required by the undertaking, the acquisition will not lead to a substantial lessening of competition in any relevant market.
There are more than 5000 long day care childcare centres in Australia. ABC currently owns or operates around 900 long day childcare centres in Australia in all states and territories. Hutchison's currently owns or manages 86 long day childcare centres in Queensland, New South Wales, Victoria, South Australia and Tasmania.
ABC's undertaking will appear on the ACCC's Mergers register and a Public Competition Assessment will be published on the ACCC website in due course.
The identities of the centres to be divested will remain confidential until the divestiture is completed pursuant to the undertaking.