The ACCC is seeking views on a proposed court-enforceable undertaking offered by THL and Apollo (ASX: ATL) in relation to THL’s proposed acquisition of Apollo.
THL and Apollo are involved in the rental, sale and manufacture of recreational vehicles (RVs), such as motorhomes and campervans. THL and Apollo are the two largest suppliers of rental RVs in Australia.
On 28 April 2022, the ACCC published a statement of issues outlining preliminary competition concerns that the proposed acquisition would remove THL’s closest and largest competitor in a market where new entry or expansion appear unlikely.
In response to the ACCC’s concerns, THL and Apollo have offered a court-enforceable undertaking that would require Apollo to divest around 80 per cent of its four to six berth motorhomes in its Australian rental fleet which include the newest motorhomes in the fleet and associated forward bookings.
The proposed undertaking also includes the divestment of leases for Apollo rental branches and depots in four locations, along with the Apollo Star RV motorhome brand.
The undertaking proposes that the divestiture assets will be sold to Jucy, which operates campervan rental businesses in Australia and New Zealand.
“In assessing THL & Apollo’s proposed undertaking, we will need to be satisfied that it will effectively address our competition concerns as well as being structured in a way that is practical and effective,” ACCC Deputy Chair Mick Keogh said.
The ACCC invites submissions on the proposed undertaking by 13 September 2022.
“The release of an undertaking for public consultation is consistent with our usual practice and should not be interpreted as a signal that the ACCC will ultimately accept the undertaking and not oppose the transaction,” Mr Keogh said.
More information, including a summary of the undertaking proposed by THL and Apollo, is available at: THL Group (Australia) Pty Ltd - Apollo Tourism & Leisure Ltd.
Background
THL is a global tourism company, with headquarters in New Zealand and operating a range of tourism-related businesses in Australia, New Zealand, the USA and the UK. In Australia, its operations include RV rental, sales, and manufacturing. THL’s Australian rental brands are Maui, Britz and Mighty Camper.
Apollo is an Australian tourism leisure company listed on the ASX, with operations in Australia, New Zealand, Canada, Germany, the UK and Ireland. In Australia, its principal activities include the manufacturing, rental, sales, and distribution of RVs. Apollo’s Australian rental brands are Star RV, Apollo, Cheapa Campa and Hippie Camper.
Jucy Group (2020) Ltd is a car and campervan rental operator in Australia and New Zealand. Next Capital, an Australian independent private equity firm, acquired a majority stake in Jucy on 12 August 2022.
A motorhome ‘berth’ refers to a sleeping space available in a motor home.