The Australian Competition and Consumer Commission will conduct market inquiries on undertakings that have been offered by Patrick Corporation to address competition concerns arising from Patrick's proposed acquisition of FCL Interstate Transport Services, ACCC Chairman, Mr Graeme Samuel, said today.
"The ACCC is not indicating that it will accept these undertakings and approve the proposed acquisition", Mr Samuel said. "Instead, the ACCC is beginning a process of market consultation. In due course, it will make a final decision in relation to whether or not to accept the undertakings and whether or not to maintain its opposition to the proposed acquisition of FCL. The ACCC will take into account information from market participants in making that decision.
"The ACCC decided to oppose the proposed acquisition of FCL on 7 September 2005. One concern was the potential for Patrick and Toll, through Pacific National, to discriminate against other freight forwarders if Patrick acquired FCL. Since then, Patrick has proposed the break-up of Pacific National which Patrick argues will address the ACCC's competition concerns.
"The undertakings contemplate FCL being held separate by Patrick and contemplate the ACCC having powers to order Patrick to divestment of FCL and other assets. The undertakings also contemplate that Patrick will be able to acquire FCL before any break-up of PN occurs. The ACCC is particularly interested in feedback from the market as to whether or not Patrick purchasing FCL before any break up of PN is achieved provides Patrick with either the ability and/or incentive to discriminate against other freight forwarders.
"The ACCC is considering the proposed acquisition of FCL by Patrick independently of the proposed acquisition of Patrick by Toll. However, in the event that the ACCC accepts Patrick's undertaking, and in the event that Toll acquires Patrick, Patrick's proposed undertaking would require Patrick to divest FCL. In addition, the undertaking accepted by the ACCC relating to Toll's proposed acquisition of Patrick, would also allow the ACCC to require Toll to divest FCL.
"As with all proposed undertakings put up for public consultation, we strongly encourage market participants to consider the proposed section 87B undertakings and provide comments to the ACCC", Mr Samuel said.
The proposed undertakings will be available shortly on the ACCC's website.
The ACCC requests that market participants provide comments by Friday, 31 March 2006.
The Public Competition Assessment explaining the basis for the ACCC's decision to oppose the proposed acquisition of FCL on 7 September 2005 is available on the ACCC's website.