ComfortDelGro Cabcharge Pty Ltd - proposed acquisition of Grenda Transit Management

Acquirer(s)

  • ComfortDelGro Cabcharge Pty Ltd

Target(s)

  • Grenda Transit Management

Summary

ComfortDelGro Cabcharge Pty Ltd proposes to acquire Grenda Transit Management.

Market definition

The ACCC considered the proposed acquisition in the context of the Melbourne metropolitan market for bus services. Within this market, the ACCC considered the likely effect of the proposed acquisition on the following segments:
i. MBSCs (Melbourne Bus Service Contracts);
ii. Orbital metropolitan bus service contracts;
iii. NBC (National Bus Company) and MBL (Melbourne Bus Link) contracts;
iv. NightRider bus contracts;
v. Government school bus contracts (public school and special school);
vi. Private school bus contracts;
vii. Rail replacement bus contracts; and
viii. Other private bus charter arrangements.

It was not necessary to form a definitive view on whether these segments constituted separate markets as the proposed acquisition was unlikely to raise concerns regardless of the market definition applied.

Competition analysis

The ACCC considered that the proposed acquisition of Grenda Transit Management by ComfortDelGro Cabcharge Pty Ltd would be unlikely to substantially lessen competition in any relevant market. Factors informing this conclusion included:

- Ticket prices for public bus services in Victoria are regulated and subject to long term contracts between bus operators and the Victorian government. Many metropolitan bus service contracts are not subject to competition and are unlikely to be competitively tendered in the foreseeable future.

- In relation to contracts that are likely to be tendered in the foreseeable future, several bus operators, both local and interstate, are likely to compete with the merged firm for these contracts.

- Private school bus service and private charter service segments are characterised by low concentration and low barriers to entry.

Timeline

DateEvent
21/10/2011ACCC commenced review under the Merger Review Process Guidelines.
03/11/2011Closing date for submissions from interested parties.
23/11/2011ACCC announced it would not oppose the proposed acquisition.