THE AUSTRALIAN Competition & Consumer Commission has announced it will not oppose will not oppose Qube Holdings’ proposed acquisition of Melbourne International RoRo & Auto Terminal Pty Ltd (MIRRAT), after accepting a court-enforceable undertaking to remedy competition concerns.
The court-enforceable undertaking accepted by the ACCC prevents Qube, its subsidiary Australian Amalgamated Terminals Pty Ltd (AAT) and MIRRAT from discriminating against downstream rivals at Webb Dock West at the Port of Melbourne.
The ACCC said the undertaking also imposes additional obligations on AAT in relation to its operations at Port Kembla in NSW, Fisherman Islands in Queensland, and Appleton Dock in Melbourne.
Qube welcomed the decision regarding MIRRAT, the only dedicated roll-on, roll-off terminal servicing the Victorian market.
Qube managing director, Paul Digney said, “We welcome the ACCC’s acceptance of the Undertaking and appreciate the constructive engagement of senior staff and the Commissioners over recent months which have helped form these binding commitments that address market and stakeholder feedback, as well as the ACCC’s requirements”.
“While it took longer than anticipated to reach this point, the sensible improvements in the new Undertaking reflect changes in both the market and the Terminal’s operations over the past seven years and achieve a more contemporary framework for AAT and MIRRAT going forward.
“…MIRRAT plays a vital role in the Victorian and national economy. This transaction will see this asset owned by an Australian company that has a proven track record of delivering efficient supply chains and outstanding services for businesses and customers.”
AAT Managing Director, Antony Perkins, said, “AAT has a strong track record of compliance with ACCC undertakings and I am confident that with this new undertaking in place, MIRRAT, under AAT’s ownership and operation, will continue to deliver excellent operational performance for the Terminal’s customers”.
The ACCC’s investigations reportedly focused on the acquisition’s impact on competition in downstream services, such as automotive stevedoring and PDI services at the Port of Melbourne.
The ACCC also examined potential competition concerns arising from Qube’s operation of the three major automotive terminals on the east coast of Australia.
“The ACCC concluded that, in the absence of adequate safeguards, Qube, through its ownership of MIRRAT, would likely have the ability and incentive to discriminate against rival stevedores and PDI providers at Webb Dock West,” ACCC chair Gina Cass-Gottlieb said.
“MIRRAT could do this, for example, by restricting its downstream rivals’ access to the terminal or related services, raising prices or lowering the quality of terminal services provided to them.”
“Long-term behavioural remedies come with particular risks and uncertainty. The ACCC is not generally supportive of such undertakings. This is why we have carefully assessed these risks when deciding whether to accept the undertaking in this matter.
“In the unique circumstances of this transaction, where there is already a similar undertaking in other ports, and where MIRRAT itself is already subject to an undertaking due to its existing vertical integration with shipping, after careful consideration we decided to accept the undertaking.”
The transaction is expected to complete on 1 May. The total consideration for the acquisition is around $332.5 million (plus stamp duty and other costs and subject to normal completion and working capital adjustments) which will be funded from Qube’s available, undrawn debt facilities.
Qube confirmed it will rebrand the MIRRAT business to the AAT brand following completion.
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