Alinta Limited - s.87B undertaking

A revised replacement for this undertaking was accepted by the ACCC on 27 November, 2006.

In light of the acceptance by the ACCC of Alinta's undertakings on 27 November 2006, Alinta's undertakings of 3 August 2006 were considered no longer relevant and were subsequently withdrawn.

• Replacement undertaking

Withdrawn undertaking by Alinta Limited 3 August 2006:

On 3 August 2006, the ACCC issued a media release announcing that it had accepted section 87B undertakings offered by Alinta Limited pursuant to section 87B of the TPA in relation to the Alinta-AGL Joint Merger Proposal.

As background, the ACCC notes that during the period prior to accepting the undertakings it considered 3 different proposals relating to AGL and Alinta.

The first proposal was AGL’s proposed acquisition of Alinta. The ACCC accepted undertakings in relation to that proposal on 16 June 2006.

The second proposal was Alinta’s proposed acquisition of AGL. At this point in time (3 August 2006) that matter has been suspended awaiting further information from Alinta.

The third proposal is the subject of these undertakings, the AGL-Alinta Joint Merger Proposal. The AGL-Alinta Joint Merger Proposal reflects a Merger Implementation Agreement signed between AGL and Alinta on 1 June 2006.

In summary, the Undertakings provided by Alinta in relation to the Alinta-AGL Joint Merger Proposal require:

• that Alinta divest the interest that it will obtain in Australian Pipeline Trust and Australian Pipeline Limited by a specified confidential date;
• that Alinta divest the Agility contracts (Agility is currently a subsidiary of AGL) that involve supplying management and operational services to the Moomba to Sydney and Parmelia Pipelines; and
• that Alinta abide by various hold separate and ring fencing commitments, including a commitment by Alinta not to nominate or vote on APL board appointments.

The undertaking notes that the ACCC may waive the requirement to divest the Agility contracts. The ACCC will make market inquiries in order to assist its decision as to whether it should waive the requirement to divest the Agility contracts.

The key competition concerns are addressed by the undertaking. The first key competition concern identified arose due to the possibility of aggregation of interests in the Moomba to Sydney Pipeline (currently owned by APT) and the Eastern Gas Pipeline (in which Alinta currently has an interest). These are the two key pipelines supplying the Sydney region. The second key competition concern identified arose due to the possibility of aggregation of interests in the Parmelia Gas Pipeline (currently owned by APT) and the Dampier to Bunbury Natural Gas Pipeline (in which Alinta has an interest). The Dampier to Bunbury Natural Gas Pipeline and the Parmelia Gas Pipeline are the two key pipelines supplying the Perth region.