The Australian Competition and Consumer Commission today began market inquiries on a proposed variation to the Undertakings given to the ACCC by Toll Holdings Ltd on 11 March 2006 in relation to Toll's acquisition of Patrick Corporation Ltd.
The proposal to vary the current undertakings arises from the proposed restructure of the Toll Group, announced by Toll today. Toll has submitted that the restructure, if it were to proceed, would result in Pacific National being transferred to a new entity which would be entirely separate from Toll's freight forwarding business.
Toll says that this will alleviate the need for it to sell 50 per cent of Pacific National, as currently required by the undertakings. Toll has also sought a waiver of its obligations to make available the East West Rail Assets, divestment of the Vehicle Transport Business and Prixcar interest, and to comply with certain non-discrimination obligations in relation to the operation of Pacific National and Patrick's container terminals.
Toll has also sought a variation in relation to the current undertakings to facilitate the sale of the Victorian Below Rail Network Assets to the State of Victoria, under the in-principle agreement made between the parties on 31 October 2006.
"The ACCC has not yet formed a view in relation to the proposed variation, and will make its decision following market inquiries", ACCC Chairman, Mr Graeme Samuel, said today. "In particular, if market inquiries do not raise any issues of concern to the ACCC in relation to Toll's obligation to divest a 50 per cent interest in Pacific National, the ACCC would look favourably on such a waiver.
"Generally, the ACCC prefers structural solutions to address competition concerns when assessing s 87B undertakings in merger matters.
"While assessing this application, the ACCC is very concerned to ensure that the process currently under way to make available the East-West Rail Assets is not delayed or disrupted. Toll is still obliged to continue the process to make available the East-West Rail Assets in accordance with the timeframes set out in the current undertaking while market inquiries are being made in relation to this matter. Only if market inquiries satisfy the ACCC that the obligations to make these assets available ought to be waived, will the ACCC agree to do so".
The proposed variation does not affect Toll's obligations to divest the Patrick Bass Strait Shipping and Freight Forwarding operations. It does not affect the validity of undertaking obligations that have already been carried out by Toll.
The ACCC is inviting comments from interested parties in relation to the proposed variation. A copy of Toll's proposed variation and other relevant information will be available on the ACCC's website, following the Mergers and Mergers register link.
Comments on the proposed variation in relation to the East-West Rail Assets are due by 20 December 2006. Comments on all other aspects of the proposed variation are due by 19 January 2007. All responses should be sent to firstname.lastname@example.org or faxed to (03) 9663 369 or posted to:ACCC
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