Logistics, Ports & Terminals

Asciano split: Breaking down a messy break-up

GRAPHIC: The Australian Competition and Consumer Commission (ACCC) has done its best to map out the proposed break-up and acquisition of Asciano’s assets, and has asked the market for its views on the matter.

Asciano is set to be split up by smaller logistics outfit Qube, along with an assembly of global investment firms.

What started as an apparently simple acquisition offer from Bermuda-based fund Brookfield, for full control of Asciano and its subsidiary businesses, has now morphed into a complex web of proposed split-ups, realignments and amalgamations, involving seven separate global investment funds.

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One could propose that Qube, the acquiring group’s eighth entity, caused all this mess, when it launched a competing bid months after Brookfield opened discussions with the Asciano board.

But the reality is that Brookfield, which owns Brookfield Rail and WA and a controlling stake in Queensland’s Dalrymple Bay Coal Terminal, was unlikely to ever get its deal past the ACCC without some significant moves taking place.

The new setup – as complex as it seems – is believed by Asciano, Qube, Brookfield and the other parties involved, to have as good a chance as any of getting past the competition watchdog, Foreign Investment Board, and other regulatory approval bodies.

Even then, there are some early concerns over the current offer.

In announcing its review into this latest iteration of the Asciano buy, the ACCC said it would carefully consider the impact of competition of each and every component of the proposed deal.

It noted that while the individual parties involved were separate entities, they held similar interests and this could create negative effects.

“The ACCC considers that these underlying commercial relationships may lead to a level of common financial interest within the consortium despite the division of the proposed acquisition of Asciano into three separate components,” the watchdog said.

Particular attention will be paid to the impact of the acquisition on automotive supply chains, container supply chains, and the interaction between Pacific National and the existing assets already owned by the rail subsidiary’s suitors.

One Pacific National buyer, GIP, for example, has an interest in NSW Ports, through its management of 15% NSW Ports owner QSuper, and another investment it has in container and terminals business TIL.

The ACCC’s outline of the companies involved appears below.

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The ACCC’s full report, and details on making submissions, are available here:http://registers.accc.gov.au/content/index.phtml/itemId/1194553/fromItemId/750991


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