ACCC resumes review of DP World’s buyout of Silk Logistics
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The news: The Australian Competition and Consumer Commission (ACCC) has recommenced its probe into multinational logistics giant DP World’s buyout of small-cap ASX-listed Silk Logistics Holdings, with a decision now set for 10 July.
The numbers: In November 2024, DP World proposed to acquire all of Silk’s shares for a cash consideration of $2.14 per share. This currently represents a 27.4% premium on its last close price, for a total value of about $174.5 million.
Shares in Silk rose 0.3% to $1.68 at 10:22am AEST.
The context: The ACCC is considering to what extent the proposed combined company “would have the ability and incentive” to favour its own port logistics services and limit rival suppliers from providing competitive offerings, as well as the loss of competition at any level of the container supply chain.
The competition watchdog outlined preliminary competition concerns in March but paused its review in April as it sought further information from the merger parties.
DP World currently handles about 10% of global containerised trade and its Australian subsidiary operates four container terminals and three container parks across Brisbane, Botany (Sydney), Melbourne, and Fremantle, in addition to inland distribution centres and warehouses.
Silk on the other hand is a port-to-door service provider offering port and contract logistics services in News South Wales, Victoria, Queensland, South Australia, and Western Australia.
The ACCC’s decision date exceeds the 30 June end date agreed to by Silk and DP World in their scheme implementation deed. This means either party could terminate the deal if they are unable to agree to an extension, although there is no public indication of this.
The next scheme meeting is scheduled for 20 June.
