The ACCC has announced this morning that it won’t oppose DP World Australia’s proposed acquisition of transport operator Silk Logistics.
Following an extensive investigation, including considering detailed responses to its statement of issues, the ACCC has concluded that the acquisition would “not likely result in a substantial lessening of competition”.
It means DP World Australia, who operates container stevedores at the ports of Botany, Melbourne, Brisbane and Fremantle, is free to acquire the transport company.
Silk is a national container logistics provider around the country, hauling import and export containers using trucks to and from ports where DP World Australia operates.
During the process, the ACCC says it considered the integration of DP World Australia’s container terminals with Silk’s national container transport and warehousing business, as well as the potential impact it would have on container transport service providers in the supply chain.
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The review focused on whether DP World would have the ability and incentive to engage in “discriminatory conduct” against Silk’s container transport rivals by raising their costs of lowering the quality of access to DP World’s Australian terminals.
The analysis indicated that DP World Australia is “unlikely” to engage in forms of discriminatory conduct that would lead to material operational delays and disruptions at DP World’s terminals.
The ACCC says a reduction in DP World Australia’s ability to efficiently process containers at its terminals would risk DP World Australia losing shipping lines in other terminals, damaging its own business.
“Although DP World Australia may be able to engage in subtle forms of discrimination without adversely affecting its primary function as a container terminal, such conduct is unlikely to reach a level so as to substantially lessen competition,” ACCC commissioner Dr Philip Williams says.
“DP World Australia would continue to face competition from a range of established and prospective container transport providers.”
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