The Australian Competition and Consumer Commission will not oppose the proposed acquisition of the Stevenson Transport Pty Limited by Cootes Holdings Pty Limited, a wholly owned subsidiary of ION Limited.
"The acquisition leads to Cootes having high market shares in the markets for the transportation of liquid petroleum gas (LPG) and bitumen", ACCC Chairman, Professor Allan Fels, said today. "However, barriers to entry in these markets were found to be relatively low and this is likely to operate as an effective competitive constraint on the ability of the merged entity to raise prices".
In particular, the ACCC noted there is a genuine threat of new entry to the markets and/or expansion by existing competitors in the event of an attempt by the merged entity to raise prices. The ACCC has conducted extensive market inquiries into this proposed acquisition consulting with customers, competitors and potential entrants.
Professor Fels also noted that customers, many of whom already transport some of their own product, possess a degree of countervailing power which is likely to act as a further constraint on the merged firm.
On this basis, the ACCC believes that the proposed acquisition is unlikely to result in a substantial lessening of competition.