Acquisitions, Freight Rail, Operations & Maintenance

ACCC seeks feedback on Aurizon ORA acquisition

The Australian Competition and Consumer Commission (ACCC) is seeking market feedback on Aurizon’s proposed acquisition of One Rail Australia (ORA) and the divestment of ORA’s east coast rail haulage business.

The undertaking proposed by Aurizon commits to divesting ORA’s east coast rail haulage business – referred to by Aurizon as “East Coast Rail” (ECR) – by way of trade sale or demerger.

Aurizon said it acknowledges that public consultation is an important part of the ACCC’s process for assessing a proposed undertaking in the context of merger transactions.

The ACCC has issued a Statement of Issues to accompany the proposed undertaking and Aurizon will continue to work with the ACCC to address any matters raised as part of the market feedback process.

The ACCC has indicated a final decision is scheduled for July 14, 2022.

Aurizon is confident that the undertaking will address any competition concerns identified by the ACCC.

BACKGROUND
On October 22, 2021, Aurizon announced that it had signed an agreement with Macquarie Asset Management to acquire ORA.

The transaction was subject to three main conditions precedent, with consent required from the Government of South Australia, the Australasian Railway Corporation and the ACCC. The first two consents have been obtained.

On December 7, 2021, the ACCC commenced its review under the Informal Merger Review Process Guidelines with a closing date for submissions of January 21, 2022, and a provisional date of March 10, 2022 for the announcement of its findings. On February 28, 2022, the ACCC advised that it had suspended this timeline pending receipt of further information. Aurizon has been working with the ACCC since that time in providing additional information.

ORA comprises bulk rail haulage and general freight assets in South Australia and the Northern Territory; the 2200km Tarcoola-to-Darwin railway line; and a haulage business in New South Wales and Queensland.

Aurizon has committed to divest East Coast Rail through a demerger or a trade sale, whichever creates greater value for Aurizon shareholders. It has committed to an enforceable undertaking with the ACCC to divest ECR following the completion of the ORA transaction.