In stock exchange jargon, the ACCC has gone ‘hostile’ over Qube’s $90 million acquisition of grain logistics company Newcastle Agri Terminal.
A hostile offer happens when a target company rejects an approach and the offeror decides to start the offer without a positive reaction from the target.
In a surprise statement yesterday the Australian Competition and Consumer Commission made it clear that Qube had not done the right thing in the way it had purchased the logistic company.
The competition regulator said Qube notified it of plans to buy Newcastle Agri Terminal on September 8 and completed the deal on September 30, “despite requests from the ACCC to delay completion of the transaction after competition concerns were raised by market participants”.
The competition concerns centre on whether Qube will now have too much control in the supply chain for the supply of grain into the Port of Newcastle.
ACCC chair Rod Sims said in the statement that Qube had left itself open to legal action from the regulator by moving ahead with the transaction before the ACCC had a chance to conduct a review.
“It is worrying when a major vertically integrated player pays $90 million for key infrastructure used to export agricultural products without first obtaining the ACCC’s view on whether the proposed acquisition is likely to have the effect of substantially lessening competition,” he said.
“The ACCC was not provided with sufficient time or information to assess the competitive impact of the transaction. The potential competition concerns which have been raised relate to the vertically integrated position that Qube will now hold in the supply chain for delivery of bulk grain to the Port of Newcastle, and the potential for Qube to engage in anti-competitive bundling of storage, handling and transport with terminal services.
“Our investigation will focus on the impact of the acquisition on the supply chain for bulk grain export through the Port of Newcastle, and the ability and incentive for Qube to discriminate against rivals,” ACCC Chair Rod Sims said.
“It is worrying when a major vertically integrated player pays $90 million for key infrastructure used for the export of agricultural products without first obtaining the ACCC’s view on whether the proposed acquisition is likely to have the effect of substantially lessening competition.”
“By choosing to proceed before the ACCC had a chance to conduct its review, Qube and the former owners of the Newcastle Agri Terminal are exposed to potential legal action by the ACCC,” Mr Sims said.
The ACCC said it was now inviting submissions from market participants who may have concerns about the acquisition or wish to share information about the market. For more information on providing information to the ACCC.
In a separate statement issued on Thursday, Qube played the aggrieved party with a spokesperson for Qube saying, “We are disappointed that the ACCC has chosen to continue with this inquiry.
“Qube advised the ACCC of the transaction in early September. Qube has also worked closely and constructively with the ACCC’s grain monitoring unit over a number of years. However, the commercial arrangements between the parties did not allow for any further delay in completion of the transaction.
“Qube believes the transaction does not raise material competition issues however will continue to provide every assistance to the Commission to allow it to complete its inquiries,” the company said.
Qube shares fell 0.6% to $3.27 on Thursday.
