ACCC sheds light on Brookfield’s proposed undertakings

The Australian Competition and Consumer Commission has kicked off market consultation on the revised undertakings offered by the Brookfield consortium in its proposed takeover of ports and rail group Asciano.

The ACCC raised preliminary competition concerns over Brookfield’s planned takeover in a Statement of Issues on October 15.

Brookfield, which already owns roughly 5000km of track in Western Australia through a long-term lease, as well as the Dalrymple Bay Coal Terminal in Queensland, made initial behavioural commitments to avoid the ACCC’s vertical competition concerns.

But these were rejected by the ACCC on November 26.

Brookfield has therefore made a number of formal proposed undertakings in an effort to win the ACCC’s approval.

Brookfield has committed to divest the intermodal business of Pacific National – Asciano’s rail subsidiary – as well as Pacific National’s limited bulk rail operations in WA, if it were to win in its takeover bid.

It has also made commitments to ensure independent operation and decision making at the Dalrymple Bay Coal Terminal, the ACCC explained.

Now the competition authority has begun its public consultation over the new terms.

But ACCC chairman Rod Sims says the opening of a consultation period should not be interpreted as any indication that the commission approves or disproves of the terms themselves at this stage.

“Indeed, the Commission has not yet had the opportunity to consider these undertakings fully but considers that its views on the undertakings will benefit significantly from market feedback,” Sims explained.

“Past experience has shown that the Commission needs to emphasise that the release of these undertakings for public comment should not be interpreted as a signal that the ACCC will ultimately accept these undertakings.”

The ACCC invited submissions from the public up to January 22, 2016.

Following market consultation, the ACCC will decide whether to accept or reject the proposed undertakings, with a final decision anticipated by February 18 – the same indicative date the commission has stated for its decision on the other proposed takeover bid for Asciano, from a consortium led by Qube Holdings.

“It should be noted that both the Brookfield and Qube decision dates are only indicative and may change,” the ACCC stated.