ACCC outlines concerns over Aurizon's Flinders acquisition
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The news: The competition regulator has flagged preliminary concerns with ASX-listed rail operator Aurizon's proposed acquisition of Flinders Logistics and its subsidiary Pirie Bulk under a share sale agreement.
The numbers: Aurizon shares lifted 0.6% to $3.62 at market open on the ASX but over the past 12 months have fallen 7.65%.
The context: The Australian Competition and Consumer Commission (ACCC) said the proposed acquisition may "substantially lesson competition" in the supply of rail haulage services for the import and export of containerised bulk minerals in South Australia.
The regulator also noted that the deal might reduce competition in the supply of stevedoring services for bulk commodities at Berth 29 — a critical berth at Port Adelaide for the import and export of certain mining products and minerals sands.
Following the acquisition, Aurizon would be responsible for the loading and unloading of all trains at Berth 29, the ACCC said, which could provide the freight company with the ability and incentive to limit access of competing rail haulage providers to the berth.
Aurizon agreed to buy Flinders Logistics and Pirie Bulk in April, subject to ACCC approval.
Pacific National's 2019 acquisition of Aurizon's Acacia Ridge Terminal was a key competition court loss for the ACCC. In 2020, the regulator sought to block the deal and failed to get High Court judges to hear its Federal Court appeal. The loss was part of former ACCC chair Rod Sims' initial campaign to change merger laws, picked up by successor Gina Cass-Gottlieb.
What they said: ACCC commissioner Liza Carver said: "Overall, we think this proposed acquisition could mean higher prices for bulk cargo customers in industries critical to the Australian economy".
The source: ASX announcement
