SummaryMacquarie Bank Limited - proposed acquisition of Dyno Nobel ASA and on-sale of the Dyno Nobel businesses in Latin America, Europe, Asia, the Middle East and Africa to Orica Limited
Market definitionThe relevant markets were considered to be the:
* separate Western and eastern Australian markets for the supply of ammonium nitrate (AN); and
* separate Western and eastern Australian markets for the supply of finished explosives, initiating systems, accessories and related services.
Competition analysisThe transactions would result in the Macquarie consortium retaining Dyno's operations in Australia, New Zealand, Canada and the United States, an explosives initiating systems plant in Mexico, and DetNet, an electronic detonator joint venture in South Africa, to which Dyno is a party. In Australia, Orica and Dyno account for all sales of domestically produced AN and most sales of finished explosives, initiation systems, accessories and related services.
The ACCC made its decision based on assurances from the parties that:
- Orica will not acquire any interest in Dyno's Australian business;
- Orica will not participate in any way in the operation or management of Dyno's
- following the transactions, there will be no on-going financing between Orica and the
Macquarie consortium; and
- with the exception of an on-going swap arrangement for the supply of ammonium
nitrate, the transactions comprise the whole of the arrangements between Orica and
the Macquarie consortium.
A significant issue raised by market participants was whether Orica's acquisition of Dyno's AN plants in Thailand and the Philippines would have a detrimental effect upon Dyno's Australian operations. The ACCC considered that the amounts imported by Dyno Australia from these plants were very limited, that alternative overseas sources of AN are available to Dyno Australia, and that Dyno Australia has plans to expand its domestic AN capacity which the transactions are unlikely to affect.
In addition, the ACCC considered that the transactions are unlikely to result in the removal of DN Australia as a competitor to Orica by depriving it of access to initiation systems components due to their availability from Dyno's North American and Mexican operations.
Accordingly, the ACCC considered that the transactions were unlikely to substantially lessen competition in the relevant markets.