SYDNEY, AUSTRALIA — The Australian Competition and Consumer Commission (ACCC) plans to issue a final decision on the proposed acquisition of Australian rail company Asciano Limited by Brookfield Infrastructure Partners LP on Dec. 17, dashing hopes of completing the deal before the end of the year.
The ACCC expressed antitrust concerns in a statement of issues released on Oct. 15. Brookfield said it is working to address concerns identified by the ACCC, but said the statement release is expected to delay the date on which the transaction could close. Brookfield and Asciano had told investors they expected the deal to close at the end of the year, but now anticipate completion in January.
The ACCC is inviting comments on the proposed acquisition through Nov. 4.
Following the proposed A$8.9 billion acquisition, Brookfield, based in Canada, would own Asciano’s rail network and train operations in two of Australia’s eight states. This includes Pacific National, which operates on Brookfield’s rail network in Western Australia and transports products to Brookfield’s terminal in central Queensland.
Market participants have raised strong concerns about Brookfield’s ability and incentive to favor Pacific National through its Brookfield Rail and terminal businesses, the ACCC said.
“The ACCC is concerned that the vertical integration will lead to a substantial lessening of competition in related markets for the supply of above rail haulage services in WA and Queensland,” ACCC Chairman Rod Sims said. “Competition concerns can be particularly acute in cases involving key infrastructure assets of a technical nature, which require many operational decisions to be made on a daily and longer-term basis.”
Where the owner of such infrastructure vertically integrates with one of a very limited number of users of the infrastructure, then the ACCC considers that an access regime may not be capable of averting a substantial lessening of competition that would otherwise arise, the ACCC said.
CBH Group, based in West Perth, Australia, said the ACCC comments recognize the concerns CBH and growers have regarding increased incentives the merger would provide for Brookfield to act anti-competitively in Western Australia.
CBH has previously urged the ACC to block the deal. CBH and Brookfield are in a heated dispute over long-term access covering Western Australia’s rail freight network. A short-term access deal, reached after CBH had to remove its locomotives and wagons from the network in May, will expire at the end of the year.