Genesee Wyoming Australia - proposed acquisition of FreightLink

Summary

Genesee & Wyoming Australia Pty Ltd (GWA) proposed to acquire the FreightLink business. FreightLink's primary asset is the Tarcoola to Darwin railway. The parties both provide rail haulage services on the railway.

Market definition

The ACCC considered the competitive effects of the proposed acquisition in the context of the following markets:
- the supply of bulk haulage services by rail (above-rail services), between Tarcoola and Darwin; and
- the supply of intermodal rail freight services between Adelaide and Darwin.

However, for the purposes of the competition analysis, the ACCC did not consider it necessary to form a definitive view regarding market definition.

The ACCC noted that there may be some arguments that competition for the supply of above-rail haulage services may take place in a broader geographic context, such as between Darwin and Adelaide. The ACCC also noted that there may be some arguments that above-rail haulage services may compete with road transport for the supply of intermodal freight services. However, the ACCC found that it was not necessary to form a concluded view on these issues.

Competition analysis

The proposed acquisition would result in the horizontal aggregation of above rail service providers, and the vertical integration of GWA's existing above-rail operations with the supply of below-rail services on the Tarcoola-Darwin railway.

The ACCC concluded that the proposed acquisition was unlikely to result in a substantial lessening of competition in the relevant markets. In forming this view, the ACCC had regard to the following factors:
- the presence of other competitors in the market for the supply of above-rail services;
- the proposed acquisition was unlikely to provide GWA with significantly greater market power than FreightLink currently has, as the FreightLink business would remain a vertically integrated above and below rail operator; and
- GWA would be subject to the same obligations for providing third party access under the Australasia Railway Access Regime as FreightLink.