A PRIVATE equity firm and industry super fund have withdrawn from a $1.2 billion deal to acquire GeelongPort.

The Australian Competition and Consumer Commission announced on Friday the Spirit Super and Palisade Investment Partners Consortium had pulled its request for merger clearance to acquire the port.

The ACCC commenced its review of the matter in January this year and published a statement in March outlining its preliminary concerns.

At the time, the ACCC explained that the consortium comprised a range of superannuation and infrastructure funds, and that the investors managed by Palisade also wholly own and operate the bulk commodity port of Portland in south-west Victoria.

The ACCC said the proposed acquisition would therefore lead to minority common ownership between ports of Geelong and Portland, which together handle more than half of Victoria’s bulk cargo.

As such, the commission’s concern was that the acquisition may “substantially” lessen competition in the supply of port services for long-term bulk cargo customers in Victoria by reducing competition between the two ports.

The proposed acquisition would also result in some common ownership interests across the two ports.

“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,” ACCC chair Gina Cass-Gottlieb said.

According to the ACCC, 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 firms has reportedly become a focus of economic regulators and most has recently been 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.

She 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,” she said.

“The ACCC conducts merger reviews with the rigour warranted by the complexity and significance of a transaction.”