Queensland Cotton Holdings Limited - proposed acquisition of the Collymongle, Mungindi and Warren gins of Twynam Agricultural Group

Summary

Queensland Cotton Holdings Ltd is involved in the ginning, marketing and distribution of cotton and the provision of related services to growers. Twynam Agricultural Group is involved in the beef, cattle feedlotting, wool, rice, cereals and the ginning and marketing of cotton.

Market definition

The relevant markets for the assessment of this proposed acquisition were considered to be the market for cotton ginning services which is likely to be regional and the market for cotton marketing services which is likely to be national.

Competition analysis

The ACCC concluded that the proposed acquisition would be unlikely to result in a substantial lessening of competition in the relevant markets.

In making its decision, the ACCC noted that in the cotton ginning market the merged entity would face competition from a number of competitors and it is unlikely that it would be able to increase its prices post-acquisition.

In the cotton marketing market, the ACCC formed the view that there appeared to be limited overlap in the operations of Queensland Cotton Holdings Limited and Twynam Agricultural Group and barriers to entry into the market are low.

Accordingly, the ACCC decided not to oppose the proposed acquisition.

Initiation

Parties