ACCC GIVES NOD TO PATRICK ON FCL ACQUISITION BID
- Latest News
- Thursday, 27 July 2006
"The ACCC has decided to accept court-enforceable undertakings* from Patrick Corporation in relation to the proposed acquisition,” said Graeme Samuel ACCC Chairman. “The undertakings offered by Patrick address the competition concerns arising from Patrick's proposed acquisition of FCL.
"The ACCC originally decided to oppose the proposed acquisition of FCL on 07 September 2005. Since that time there have been changes in the likely level of future competition in the relevant markets. Furthermore, the undertakings offered ensure that the level of competition will not be lessened in the future due to the proposed acquisition of FCL.
"When the ACCC opposed the acquisition of FCL one of the key concerns was the potential for Patrick and Toll, through Pacific National, to discriminate against other freight forwarders if Patrick acquired FCL. Another concern was an increase in the level of barriers to entry, because potential rivals to Pacific National would not be able to access FCL's freight volumes if Patrick owns FCL.
"While the ACCC still considers these competition issues as potential concerns, Patrick is currently pursuing capacity allocation from Pacific National in order to begin its own rail service and is also seeking the break-up of Pacific National. If Patrick is successful and its actions result in there being two significant independent rail competitors for interstate containerised freight rail line-haul, particularly on the east-west corridor, it will address the competition concerns and lead to a significantly higher level of competition," Mr Samuel said. "The ACCC considers that the acquisition of FCL is an important part of Patrick's attempts to achieve this outcome because FCL provides Patrick with significant container volumes to place on Patrick's proposed new rail services.
"However, in the event that Patrick's proposed actions in relation to Pacific National fail to address the competition concerns, the ACCC has broad powers to order divestment of FCL and other Patrick assets. More info on www.accc.gov.au
