SYDNEY, AUSTRALIA — The Australian Competition and Consumer Commission (ACCC) will not oppose GrainCorp Ltd.’s proposed acquisition of Cargill Australia Ltd.’s bulk grain storage and handling facility in Gilgandra, New South Wales, Australia.

“The ACCC conducted extensive market inquiries with market participants, including grain growers, grain traders, exporters, and competing suppliers of storage and handling services in the Dubbo region,” said Rod Sims, chairman of the ACCC. “Growers and other market participants were not generally concerned about the proposed acquisition. Despite the transaction resulting in the removal of a close competitor to the existing GrainCorp site in Gilgandra, based on market feedback, the ACCC considered that there will be effective competition from other suppliers of storage and handling services in the region.

“On-farm grain storage is also increasing, but will not be a complete substitute for upcountry bulk storage and handling facilities.”

The ACCC also considered GrainCorp’s ability and incentive to discriminate between grain growers, by charging more or offering poorer service to growers that have fewer alternatives for storage and handling. Based upon market inquiries, the ACCC considered that discrimination between different growers was unlikely.

“In forming this view, the ACCC noted that GrainCorp publishes a schedule of fixed storage and handling fees on the East coast,” Sims said. “In addition, GrainCorp would continue to have an incentive to deliver efficient services to growers, in order to maximize throughput in its facilities.”

GrainCorp is an integrated grain handling and processing business with grain supply chain assets predominantly on the East coast, including upcountry storage, port and terminal storage and handling, and trading and marketing. In Gilgandra, GrainCorp currently operates an upcountry bulk storage and handling facility.

Cargill Australia is a wholly-owned subsidiary of Cargill, a privately-owned international company based in Minnesota, U.S. In 2011, Cargill purchased the commodity management businesses of AWB Ltd., including AWB’s grain storage assets. In Gilgandra, Cargill operates an upcountry bulk storage and handling facility, adjacent to GrainCorp’s facility at Gilgandra.