Shahin Enterprises Pty Ltd - s.87B undertaking

Company or individual details

  • Shahin Enterprises Pty Ltd
    008 150 543

Undertaking

On 8 May 2014, the ACCC announced that it had accepted an undertaking (the Undertaking) from Shahin Enterprises Pty Ltd (the main operating entity of Peregrine, Shahin) in relation to its proposed acquisition of 25 service station sites from BP Australia Pty Ltd (BP), comprising:

  • 16 sites in metropolitan Adelaide (the Proposed Acquisition); and
  • nine sites in regional South Australia.

The ACCC considered that, in the absence of this Undertaking, the Proposed Acquisition would have the effect, or would be likely to have the effect, of substantially lessening competition in the retail supply of petrol in local markets surrounding each of the following BP sites:

  1. BP Westbourne Park;
  2. BP Elizabeth Vale;
  3. BP Mitchell Park; and
  4. BP Mile End (each a Local Market).

The ACCC considered that these BP sites and existing Shahin sites in each Local Market are close competitors to each other; taking into account their geographic location, the goods and services that they supply, and the types of customers to which they cater.

Shahin already operates a high proportion of the sites in each Local Market. With the Proposed Acquisition, Shahin would acquire an additional site in each Local Market, and remove a competitor. Having regard to the geographic location and characteristics of any remaining competitors in each Local Market, the ACCC considered that there would be few effective competitors to Shahin in each Local Market if the Proposed Acquisition proceeded.

As a result the ACCC considered that the Proposed Acquisition would be likely to have the effect of reducing the competitive constraints on Shahin, allowing it to increase prices (or implement an equivalent reduction in the non-price aspect of its retail offer) at one or more of its sites (including former BP sites) in each Local Market. The ACCC considered that new entry into each Local Market would be unlikely to occur on a sufficient scale, or in a timely enough fashion, to constrain Shahin from acting in this manner if the Proposed Acquisition proceeded.

The objective of the Undertaking is to address the ACCC’s competition concerns, which would otherwise arise as a consequence of the Proposed Acquisition. This Undertaking addresses the ACCC’s competition concerns in the Local Markets by:

  1. in relation to the ACCC’s competition concerns regarding Shahin’s acquisition of BP Elizabeth Vale, requiring Shahin to divest BP Elizabeth Vale to an Approved Purchaser;
  2. in relation to the ACCC’s competition concerns regarding Shahin’s acquisition of BP Westbourne Park, requiring Shahin to divest BP Westbourne Park to an Approved Purchaser;
  3. in relation to the ACCC’s competition concerns regarding Shahin’s acquisition of BP Mitchell Park, requiring Shahin to divest OTR South Plympton to an Approved Purchaser;
  4. in relation to the ACCC’s competition concerns regarding Shahin’s acquisition of BP Mile End, requiring Shahin to divest BP Mile End to an Approved Purchaser
  5. ensuring the Approved Purchasers have the necessary assets to operate the Divestiture Businesses effectively;
  6. ensuring the provision of any Technical Assistance by Shahin required by the Approved Purchasers to operate the Divestiture Businesses effectively;
  7. preserving the Divestiture Businesses prior to divestiture; and
  8. providing for the effective oversight of Shahin's compliance with this Undertaking.

As part of accepting the Undertaking the ACCC approved: Caltex Australia Petroleum Pty Ltd (Caltex); and Frank Agostino, Weeroona Holdings Pty Ltd and Talunga Properties Pty Ltd (together, Agostino), as Approved Purchasers of nominated Divestiture Businesses.

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