A consortium led by Spirit Super and Palisade Investment Partners has pulled out of a proposed $1.2 billion acquisition of the Port of Geelong.
The consortium had negotiated purchase of the GeelongPort business from Brookfield and SAS Trustee Corporation.
Spirit Super and Palisade pulled out of the deal after being informed that the ACCC continued to hold competition concerns first expressed at the end of March. The ACCC had said then that it was concerned that the proposed acquisition might substantially lesson competition in the supply of port services for long-term bulk cargo customers in Victoria by reducing competition between the Port of Portland and the Port of Geelong. The two ports together handle over half of Victoria’s bulk cargo.
The ACCC announced on 26 August that the consortium, which also included Commonwealth Superannuation Corporation (CSC), had withdrawn its request for clearance for the proposed acquisition.
The ACCC said the acquisition would have resulted in Palisade managing, on behalf of investors, 100% of the Port of Portland and 49 per cent of the Port of Geelong. In addition, the proposed acquisition would have resulted in some common ownership interests across the two ports.
ACCC chair Gina Cass-Gottlieb said: “We were concerned the common fund management and ownership interests between the Port of Geelong and the Port of Portland would reduce competition for customers between the ports over the medium to long-term.”
Superannuation and other investment funds have interests in many of Australia’s critical infrastructure assets. The issue of common fund management and ownership among competing businesses, including via minority interests, has increasingly become a focus of economic regulators and recently became the subject of a Standing Committee on Economics inquiry.
“Common fund management and ownership that allow a degree of control or influence by minority interests have the potential to detrimentally effect competition,” Ms Cass-Gottlieb said. “Parties proposing to acquire interests in critical infrastructure should expect the ACCC’s review will be careful and thorough. Such transactions may have long-term consequences for competition. The ACCC conducts merger reviews with the rigour warranted by the complexity and significance of a transaction.”
Image: Port of Geelong.