Leighton Holdings - proposed acquisition of Henry Walker Eltin Mining

Summary

Leighton Contractors Pty Limited (Leighton) - proposed acquisition of Henry Walker Eltin Mining (HWE Mining). Leighton is part of The Leighton Group of companies, which offers a broad range of project development and contracting services and skills to public and private sector clients from a wide range of industries. HWE Mining provides a wide range of technical and managerial services to the mining industry, including quality, environmental and safety management, employee, community and indigenous relations, surface and underground mining, processing and handling of ore and finished products, the design, construction and maintenance of mine infrastructure and closure and rehabilitation of mining sites.

Market definition

The relevant markets to this transaction are the national markets for:
a. the supply of mining services for larger scale projects or Tier 1 projects; and
b. the supply of mining services for smaller scale projects or Tier 2 and Tier 3.

Competition analysis

The ACCC considered that the proposed acquisition is unlikely to result in a substantial lessening of competition in the national market for supply of mining services for larger scale projects (Tier 1) and the national market for the supply of mining services for smaller scale projects (Tier 2 and Tier 3) on the following basis:

- in the market for larger scale projects, the merged firm will continue to be constrained by a strong competitor, Downer Roche. In addition, the merged firm will continue to be constrained by smaller contractors who can form joint ventures or alliances to be in a position to tender for larger scale projects;
- in the market for smaller scale projects, there are a large number of competitors;
- evidence of recent new entrants, and the ability of smaller competitors to lease plant and equipment and jointly tender for larger scale projects, indicates that possible barriers to entry can be overcome; and
- the merged firm is likely to continue to be constrained by customers who possess strong countervailing power given their ability to terminate contracts and turn to in-house solutions for mining services.

Accordingly, the ACCC did not intervene in the proposed acquisition.

Merger type

Horizontal

Initiation

Parties