The Australian Competition and Consumer Commission (ACCC) has confirmed it will not oppose Elders Limited’s proposed acquisition of Delta Agribusiness, subject to Elders’ divestments.
It comes after Elders agreed to a court-enforceable undertaking to divest six Delta stores in Western Australia. The ACCC has approved Independent Rural Pty Ltd as the purchaser for Delta stores in Dalwallinu and Kalannie, and E. E. Muir & Sons Pty Limited (Muirs) as the purchaser for Delta stores in Albany, Hyden, Manypeaks and Wellstead.
“Following an in-depth review, we were concerned that the proposed acquisition would be likely to substantially lessen competition in several local areas in Western Australia,” ACCC deputy chair Mick Keogh said.
“Our review closely considered the likely effect of the proposed acquisition on competition in each local area where both Elders and Delta have a retail store, taking into account the specifics of each local area.
“We examined the strength of competing retailers, the particular geographic features and size and type of farms, among other factors. We also engaged with a range of stakeholders including farmers, competing retailers, wholesale suppliers, buying groups and industry bodies as part of our review.
“The nature of competition in the retail supply of rural merchandise is more localised than is the case in other retail sectors, partly due to the differences in farming in different local areas, and the importance of local relationships.”
Following Elders’ commitment to divest the selected stores, the ACCC has given the green light to the acquisition. Elders and Delta both supply rural merchandise such as agricultural chemicals, seed, fertiliser, animal health products and related services.
Following its review, the ACCC concluded the acquisition was “unlikely to substantially lessen competition” within the sector.
“Ultimately, the ACCC did not consider that the proposed acquisition was likely to substantially lessen competition in any relevant market with the undertaking provided by Elders,” Keogh said.
Elders managing director and chief executive officer Mark Allison welcomed the ACCC’s decision.
“Elders has always maintained that the transaction with Delta will not lessen competition in rural merchandise markets in Australia and will ultimately benefit farmers. Our commitment is to maintain Delta’s independence and support its people to continue to deliver for clients,” he said.
“We are confident that our light touch integration approach, combined with both companies’ deep local knowledge and community connections, will foster a robust and responsive agricultural service that ultimately supports customers to thrive in a competitive operating landscape.
“The acquisition of Delta will provide Elders with a range of benefits that aim to have a flow on affect to clients, including allowing greater access to an expanded product and services range, stronger supply partnerships, enhanced expertise, and greater collaborative innovation efforts.
“Beyond this, Elders will have a greater capacity to fill retail network gaps, particularly in New South Wales, North West Victoria, South Australia and Western Australia.”
Delta managing director and co-founder Gerard Hines said the company was excited to join Elders.
“This transaction is the culmination of a thorough two-year process to find the right long-term shareholder for Delta Ag. With Elders, we have found a partner that shares our values and our commitment to supporting farming families and regional communities,” he said.
“Our staff, customers, and suppliers can be confident that it will be business as usual – only with the added strength and opportunities that come from being part of a larger national group.”