- 50 per cent interest in Australian Amalgamated Terminals Pty Ltd
SummaryQube Holdings Limited (Qube) proposed to acquire a 50 per cent shareholding in Amalgamated Terminals Pty Ltd (AAT) held by a Brookfield-led consortium.
Prior to the proposed acquisition, AAT was a 50/50 joint venture between Qube and the Brookfield-led consortium. The operation of AAT was subject to an ACCC authorisation granted in December 2009 (the Authorisation). The authorisation restricted AAT from discriminating against non-shareholder suppliers of stevedoring and pre-delivery inspection (PDI) services, including new entrants.
The proposed acquisition would result in Qube holding 100 per cent of AAT, and in AAT no longer needing to comply with the conditions of the Authorisation.
Qube is an Australian provider of import and export logistics services.
AAT is a multi-user facility provider to the stevedoring industry in Australia and operated terminals at each of the Port of Brisbane, Port of Melbourne, Port Kembla and Port Adelaide (however, its operations at the Ports of Melbourne and Adelaide were each expected to cease in 2017).
The Brookfield-led consortium also owned LINX Cargo Care (LINX). LINX is a stevedoring and PDI business comprising LINX Stevedoring and Autocare (formerly Patrick Bulk and Automotive Port Services). As a result of the proposed acquisition, LINX would no longer be vertically integrated with AAT.
Market definitionThe ACCC considered the likely impact of the proposed acquisition in markets at each of the Port of Brisbane, Port of Melbourne, Port Kembla and Port Adelaide for:
(a) the supply of automotive terminal services
(b) the supply of automotive stevedoring
(c) the supply of vehicle pre-delivery inspection services
(d) the supply of general cargo terminal services
(e) the supply of general cargo stevedoring services
The ACCC considered that the geographic scope of each market is typically limited to the port at which these services are supplied.
Competition analysisThe ACCC concluded that the proposed acquisition would not substantially lessen competition in any relevant market after accepting a court-enforceable undertaking from Qube and AAT (the Undertaking).
The ACCC was concerned that the proposed acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in markets (b), (c) and (e) in the absence of the Undertaking.
The ACCC was concerned that after the proposed acquisition Qube (through its 100 per cent ownership of AAT) would have the ability and incentive to discriminate against existing and potential competing stevedoring and PDI operators. The ACCC considered that the proposed acquisition could lead to the following types of discrimination:
(a) AAT possibly discriminating between users of the terminal, for example by agreeing to supply certain port services to Qube's downstream businesses on better terms or prices than it does to third parties
(b) AAT possibly foreclosing entry and expansion of third party stevedores or PDI operators, for example by setting higher prices for services it provides
(c) Qube possibly having access to commercially sensitive information provided to AAT by its downstream competitors, shipping lines and car manufacturers and using it to favour its own downstream businesses.
In order to address the competition concerns set out above that would otherwise have arisen as a result of the proposed acquisition, the ACCC accepted the Undertaking from Qube and AAT. The Undertaking aims to remedy the ACCC's competition concerns by:
(a) requiring AAT to not discriminate between users of the AAT terminals, (including discriminating in favour of a Qube related entity), and requiring AAT and Qube not to prevent or hinder access to AAT terminals
(b) requiring AAT to ring fence confidential information and requiring AAT and Qube to maintain controls to ensure that confidential information is not disclosed to unauthorised personnel
(c) requiring AAT to comply with the price and non-price dispute resolution processes, which includes the appointment of an ACCC approved independent price expert
(d) providing for the effective oversight of Qube's and AAT's compliance with the Undertaking, including a compliance audit by an ACCC approved independent auditor
(e) providing for regular reviews of the Undertaking to ensure that the undertaking continues to meet its objective.
UndertakingsQube and AAT - section 87B Undertaking - signed 23 November 2016 (with Schedule 2 documents). UPDATE: The original berthing allocation rules were inadvertently omitted from Schedule 2 of the Undertaking published on the ACCC's undertakings register in November 2016. The attached new version of the Undertaking includes the berthing allocation rules that were in place at the time the Undertaking was signed. No other changes to the Undertaking have been made. For current berthing allocation rules please visit AAT's website www.aat.auz.biz.
Limited waiver (clause 6.4(a) - Ring Fenced Personnel) - on 26 March 2018, the ACCC granted AAT and Qube a limited waiver of clause 6.4(a) of the undertaking to permit AAT Managing Director, Antony Perkins, to assist Qube in the development of the rail operations at the Moorebank Intermodal (port shuttle) and Interstate rail terminal at Moorebank for two years. The limited waiver is subject to the condition that Mr Perkins provides details of his role with Qube and any breaches or potential breaches of clause 6 of the undertaking to the ACCC and independent auditor in accordance with clause 8(a) of the undertaking.
|08/08/2016||ACCC commenced review under the Merger Process Guidelines.|
|23/08/2016||Closing date for submissions from interested parties. ACCC assessing information provided during market inquiries and consulting with merger parties on any relevant issues or concerns arising.|
|29/09/2016||Former provisional decision date of 6 October 2016 delayed to allow the ACCC to consider the feedback received from market participants on the undertaking proposed by Qube and AAT.|
|17/11/2016||ACCC recommenced timeline.|
|24/11/2016||ACCC announced it would not oppose the proposed acquisition, subject to the section 87B undertaking accepted by the ACCC.|