The ACCC says it will not oppose the proposed $2.5 billion takeover of Link Administration Holdings by Canada’s Dye & Durham Corporation, after accepting a court-enforceable undertaking from the Canadian company to sell its existing Australian business.
Through the acquisition of Link, D&D will get control of the 42.77% shareholding in electronic property conveyancing group PEXA Group that Link currently owns.
The competition regulator had raised significant concerns about the takeover which would have seen the vertical integration of D&D’s existing information broking services, conveyancing and legal practice management software with PEXA’s Electronic Lodgement Network.
“Without the divestment of D&D’s Australian businesses, the proposed acquisition would have aligned PEXA, a near monopoly provider of Electronic Lodgement Network services, with D&D, a significant supplier of software to lawyers and conveyancers,” ACCC Chair Gina Cass-Gottlieb said in a statement on Thursday.
This alignment raised concerns that D&D and PEXA would have allowed for mutual preferential dealing that would have hindered competition or raised barriers to entry in one or more markets in the conveyancing workflow.
“We were conscious of PEXA’s position as the only fully operational Electronic Lodgement Network and the sensitive period of transition underway as interoperability between Electronic Lodgement Network Operators emerges.
“Therefore, the ACCC has focussed on ensuring that the post-acquisition market structure does not hinder competition over the longer term.” Ms Cass-Gottlieb said
Under the court-enforceable undertaking, D&D must sell its existing Australian businesses to a purchaser approved by the ACCC.
“The ACCC carefully considered responses from a broad range of market participants about the undertaking in reaching this decision,” Ms Cass-Gottlieb said.
“Ultimately, the ACCC concluded that the proposed acquisition, taking into consideration the divestiture undertaking, would be unlikely to substantially lessen competition.”
“E-conveyancing is critical to finalising property transactions in a number of Australian states and territories. The ACCC supports the development of competition in this important industry.
“A robust and enforceable regulatory regime, led by the Australian Registrars’ National Electronic Conveyancing Council, will be critical to ensuring effective outcomes in this industry,” Ms Cass-Gottlieb said.
In a separate statement on Thursday, Link noted the ACCC decision and also revealed that the Central Bank of Ireland’s (CBI) had given its approval in respect of the transaction.
“Written notification from the ACCC that it does not propose to intervene in the transaction and approval from the CBI were conditions precedent to the Scheme of arrangement takeover.
On Wednesday Link said the second federal court hearing on the scheme of arrangement due to be held today, September 9 had been postponed to Thursday September 15 to allow the approvals from the ACCC and Irish central bank.
Link shares rose 6.2% to $4.58.
