ACCC will not oppose Vossloh Austrak deal

15 November 2018

The ACCC will not oppose the proposed acquisition of Austrak by Vossloh Australia.

Vossloh and Austrak are suppliers of rail track components. Vossloh supplies rail fastening components and switch systems including turnouts, while Austrak supplies concrete sleepers and bearers.

“There is no horizontal overlap between the products manufactured and supplied by Vossloh and Austrak in Australia. There are vertical links, however, and this is what the ACCC’s investigation focussed on,” ACCC Commissioner Roger Featherston said.

The concrete sleepers that Austrak manufactures and supplies are manufactured to fit specific fastening systems (potentially including those manufactured by Vossloh). In addition, Austrak supplies concrete bearers to turnout manufacturers such as Vossloh for use in the production of turnouts. 

“The ACCC considered whether the proposed acquisition could enable the combined Vossloh-Austrak to lessen competition in either turnouts or fastenings by foreclosing its rivals,” Mr Featherston said.

The ACCC’s inquiries indicate there are alternative manufacturers of sleepers and bearers in Australia and some imports.

“After speaking with a range of industry participants, we consider that existing manufacturers of sleepers and bearers could expand their offerings, including by increasing production or expanding their geographic presence,” Mr Featherston said.

In relation to fastening components, industry participants also indicated that there is a very strong competing supplier, whose products are approved for use in most rail tracks, and is likely to continue to constrain Vossloh post acquisition.

The ACCC also considered concerns raised about the possible disclosure of confidential turnout and fastening information to the combined Vossloh-Austrak, but did not consider that it would cause a substantial lessening of competition.

More information is available at Vossloh Australia Pty Ltd - proposed acquisition of Austrak Pty Ltd.

Background

Austrak is a wholly owned subsidiary of Laing O’Rourke, and is the largest concrete sleeper manufacturer and supplier to the rail industry in Australia.

Sleepers are rectangular supports that support the rails and uniformly transfer and distribute loads to the underlying ballast.

Fastening components are used to connect rails to railway sleepers. Turnouts enable trains to move from one track to another. Bearers are similar to sleepers, but lie underneath turnouts instead of straight track and are specifically designed for each turnout.

Austrak has concrete sleeper manufacturing facilities in four states (Qld, NSW, WA, Vic).

Vossloh is a subsidiary of Vossloh AG, a German rail technology company which manufactures and supplies rail infrastructure. In Australia, Vossloh supplies rail fastenings and switch systems, including turnouts which enable trains to move from one track to another. 

Vossloh does not manufacture or supply sleepers in Australia. It supplies fastenings in Australia for use with slab track and does not currently supply fastenings for use in ballasted track (although it has the ability to do so).

Release number: 
232/18
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