PERTH (miningweekly.com) – The Australian Competition and Consumer Commission (ACCC) on Wednesday said that it would not oppose the A$13-billion takeover of infrastructure group APA Group.
The directors of the company in August unanimously recommended the A$11 a share takeover offer from a consortium led by CK Infrastructure Holdings.
ACCC chairperson Rod Sims said on Wednesday that the watchdog had decided not to oppose the acquisition after accepting a court-enforceable undertaking from CK Consortium to divest significant gas assets in Western Australia.
“The ACCC concluded that, in the absence of the undertaking, the proposed acquisition was likely to substantially lessen competition. The ACCC was concerned about the removal of the CK Consortium as the competitor in relation to new pipeline development.
“The ACCC was also concerned about gas transmission and storage services in Western Australia, given that, without the undertaking, the CK Consortium would own most gas transmission and storage facilities in the West,” Sims said.
He said that the undertaking addressed these concerns and created an opportunity for a new operator to acquire a valuable set of assets, along with the personnel needed to operate and manage the assets, creating an operator similar in size to the CK Consortium’s current operations in Western Australia.
The assets tipped for divestment include the Parmelia gas pipeline, the Goldfields gas pipeline, the Kalgoorlie to Kambalda pipeline and the Mondarra gas storage facility.
Sims said that the purchaser of the divestment assets would need to be approved by the ACCC, and when approving a new owner, the watchdog will focus on its ability to be an effective and long-term competitor for the development of new pipelines.
In eastern Australia, the CK Consortium has a limited number of gas transmission pipelines, and these only supply small regional centers or specific customers. There was also no competition between CK Consortium’s existing eastern Australian assets and those of APA.