Aurizon prevented from closing Queensland intermodal business

13 August 2018

The Federal Court has ordered that Aurizon (ASX: AZJ) must continue operating its Queensland intermodal business while the ACCC’s case against Pacific National and Aurizon is heard and determined.

The ACCC instituted proceedings in July this year against Pacific National and Aurizon, and their related entities, for allegedly reaching an understanding about Aurizon’s intermodal business that had the purpose and/or would be likely to have the effect of substantially lessening competition in the supply of intermodal and steel rail linehaul services. 

In addition, the ACCC alleges that Pacific National’s proposed acquisition of Aurizon’s Queensland intermodal business and the Acacia Ridge Terminal, as well as an agreement for Pacific National to operate the interstate side of the Acacia Ridge Terminal, would each separately have the likely effect of substantially lessening competition.

Following today’s hearing, the ACCC has been granted injunctions against Aurizon which require it to continue to operate its Queensland intermodal business.  The ACCC also sought orders for injunctions against Pacific National not to solicit employees and the top 10 customers of the business until the court proceedings are finalised, however those orders were not made. 

“Given Aurizon’s previous announcements that it would close its Queensland intermodal business if the Pacific National acquisition was opposed by the ACCC, the ACCC sought an urgent interlocutory injunction to prevent Aurizon from closing its Queensland intermodal business until the ACCC’s proceedings involving that business are determined by the Court,” ACCC Chair Rod Sims said. 

“It is part of the ACCC’s case that, at all times, Aurizon had alternatives to selling to Pacific National that would have been more competitive. The ACCC is aware of at least one alternative purchaser that is willing and able to acquire Aurizon’s entire remaining intermodal business.”

The final proceedings have been set down for a two week hearing starting on 19 November 2018. 

“The ACCC will allege that it was more lucrative for Aurizon to agree to sell parts of the intermodal business to the closest competitor and close parts of that business than it was to sell the whole intermodal business to a new entrant,” Mr Sims said.

Release number: 
MR 153/18
ACCC Infocentre: 

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