Louis Dreyfus Company B.V., Louis Dreyfus Company Melbourne Holdings Pty Ltd and LDC Enterprises Australia Pty Limited

On 1 August 2024, the ACCC announced it had accepted a court-enforceable undertaking given by each of Louis Dreyfus Company B.V. and its subsidiaries Louis Dreyfus Company Melbourne Holdings Pty Ltd and LDC Enterprises Australia Pty Limited on their own behalf and on behalf of their respective subsidiaries (LDC Group) pursuant to s87B of the Competition and Consumer Act 2010 (Cth) (the Undertaking) in connection with the proposed acquisition by LDC Melbourne of all the fully paid ordinary shares in Namoi Cotton Limited (the Proposed Acquisition).

The ACCC was concerned that in the absence of the Undertaking, the Proposed Acquisition would have the effect, or would be likely to have the effect, of substantially lessening competition in the market for the supply of cotton lint classing services in Australia (Classing Market) and the market for the supply of ginning services in the north of Western Australia and the Northern Territory (Western Australia and Northern Territory Ginning Market).

Objective of the Undertaking

The objective of this Undertaking is to address the ACCC’s competition concerns that would otherwise arise as a consequence of the Proposed Acquisition. The Undertaking aims to achieve this by placing obligations on LDC Group:

• to divest LDC Enterprises’ shareholding in Proclass, a supplier of cotton lint classing services (the ProClass Shareholding)
• to ensure that the ProClass Shareholding is divested in a manner that will maintain ProClass as a viable, effective, stand-alone, independent and long-term competitor for the Classing Market
• to maintain the economic viability, marketability, competitiveness and goodwill of ProClass prior to divestiture of the ProClass Shareholding
• to terminate the WANT Joint Venture Agreement (WANT JVA) in relation to the WANT cotton gin
• to ensure that the WANT gin will operate as a viable, effective, stand-alone, independent, and long-term competitor located in the Northern Territory and Western Australian Ginning Market following the termination of the WANT JVA
• to maintain the operational support required for the successful establishment and ongoing operation of the WANT gin prior to termination of the WANT JVA
• to ensure that its know-how and expertise on technical operations is transferred to the new operator of the WANT gin to enable it to reliably operate the WANT gin
• to provide for the effective oversight of LDC Group’s compliance with the Undertaking.