ACCC seeks feedback on Patrick’s FCL undertakings

<p>The Australian Competition and Consumer Council has given Patrick Corp hope in its $165m quest to buy FCL Interstate Transport Services.</p> <p>Commission chairman Graeme Samuel said today (Friday, March 17) that the ACCC would conduct market inquiries on undertakings that Patrick had made to address competition concerns arising from the deal.</p> <p>The development comes as the market awaits a new price from Toll Holdings for Patrick.</p> <p>Patrick wants FCL so it can boost its freight forwarding operations and compete against Toll, which is trying to take over Patrick.</p> <p>A growth strategy including FCL might help Patrick `s defence against Toll.</p> <p>"The ACCC is not indicating that it will accept these undertakings and approve the proposed acquisition", Mr Samuel said. </p> <p>"Instead, the ACCC is beginning a process of market consultation.&#8221</p> <p>The ACCC would take into account information from market participants in making its decision, he said.</p> <p>A concern in its opposition to the deal in September was the potential for Patrick and Toll Holdings, through Pacific National, to discriminate against other freight forwarders if Patrick acquired FCL. </p> <p>&#8220Since then, Patrick has proposed the break-up of Pacific National which Patrick argues will address the ACCC’s competition concerns,&#8221 he said.</p> <p>"The undertakings contemplate FCL being held separate by Patrick and contemplate the ACCC having powers to order Patrick to divestment of FCL and other assets. </p> <p>&#8220The undertakings also contemplate that Patrick will be able to acquire FCL before any break-up of Pacific National occurs. </p> <p>&#8220The ACCC is particularly interested in feedback from the market as to whether or not Patrick purchasing FCL before any break-up of Pacific National is achieved provides Patrick with either the ability and&#47or incentive to discriminate against other freight forwarders.</p> <p>"The ACCC is considering the proposed acquisition of FCL by Patrick independently of the proposed acquisition of Patrick by Toll. </p> <p>&#8220However, in the event that the ACCC accepts Patrick’s undertaking, and in the event that Toll acquires Patrick, Patrick’s proposed undertaking would require Patrick to divest FCL. </p> <p>&#8220In addition, the undertaking accepted by the ACCC relating to Toll’s proposed acquisition of Patrick, would also allow the ACCC to require Toll to divest FCL.&#8221</p> <p>Mr Samuel called on market participants to consider the proposed section 87B undertakings and provide comments.</p> <p>The proposed undertakings will be available shortly on the ACCC’s website, www.accc.gov.au by following the link to Mergers and then the link to Mergers Public Register.</p> <p>The deadline for comments is Friday, March 31.</p> <br />