Perpetual Limited - s.87B undertaking

On 18 September 2013, the ACCC accepted an undertaking (the Undertaking) from Perpetual Limited (Perpetual) in relation to its proposed acquisition of The Trust Company Limited (the Proposed Acquisition). The ACCC considered that, in the absence of the Undertaking, the Proposed Acquisition may have the effect, or may be likely to have the effect, of substantially lessening competition in one or more relevant markets for the supply of corporate trust services. In the absence of the Undertaking, the Proposed Acquisition would result in Perpetual owning a 13.4% interest in Equity Trustees Limited. The ACCC was concerned that, in the absence of the Undertaking, Perpetual may have an increased ability and incentive to unilaterally raise prices since Perpetual, through the shareholding in Equity Trustees Limited, would be able to recoup part of any lost profit from any customer lost to Equity Trustees Limited through the dividends it would receive as a shareholder. The ACCC was also concerned that the Proposed Acquisition, in the absence of the Undertaking, may result in Perpetual having the ability to influence or gain insight into the operations of Equity Trustees Limited, such as by using the shareholding to seek board representation.

The objective of the Undertaking is to address the ACCC’s competition concerns, which would otherwise arise as a consequence of the Proposed Acquisition. The Undertaking aims to achieve this objective by:

(i) providing for Perpetual to divest the 13.4% interest in Equity Trustees Limited within a set timeframe;
(ii) maintaining the independence of Equity Trustees Limited while Perpetual remains a shareholder by ensuring Perpetual does not seek representation on the board of Equity Trustees Limited or appoint any common directors;
(iii) maintaining the economic viability and competitiveness of the Divestiture Shareholding prior to divestiture; and
(iv) providing for the effective oversight of Perpetual’s compliance with this Undertaking.