The High Court of Australia has dismissed the Australian Competition and Consumer Commission’s (ACCC) application for special leave to appeal the Federal Court’s decision on the sale of the Acacia Ridge intermodal terminal.
The decision means that Aurizon’s sale of the Acacia Ridge intermodal terminal to Pacific National can proceed, three years after the sale was announced in 2017.
In a statement, Pacific National welcomed the court’s decision.
“Pacific National welcomes today’s decision and is looking forward to adding the Acacia Ridge Terminal to its network of efficient freight terminals.”
The terminal was put up for sale when Aurizon sold off their intermodal business. While Linfox purchased the majority of Aurizon’s intermodal assets, Pacific National took on the Acacia Ridge terminal where the interstate standard gauge network joins Queensland’s narrow-gauge network.
The ACCC launched legal proceedings in the Federal Court in 2018, seeking a declaration that Pacific National’s purchase of the Acacia Ridge Terminal would substantially lessen competition in the market. In the ruling that followed, Pacific National undertook to not discriminate against rivals through its operation of the terminal.
In a subsequent appeal launched by the ACCC, the Full Federal Court found that even without Pacific National’s voluntary undertaking, the purchase of the Acacia Ridge Terminal would not substantially lessen competition.
The ACCC has pursued the Acacia Ridge case due to it being a test of Australia’s merger laws, said ACCC chair Rod Sims.
“The ACCC faces challenges in contested merger cases where a forward looking merger test is applied. The nature of the test, and the inherent uncertainties in predicting the future, make it difficult to prove that a change in the market structure after the merger will substantially lessen competition in the future,” said Sims.
“This task is further complicated by the need to prove that competition is likely to be substantially lessened compared to a hypothetical future in which the acquisition did not occur,” Sims continued.
“These challenges raise important issues for the consideration of whether Australia’s current merger laws are fit for purpose.”
In an ASX statement, Aurizon said that the sale can now progress.
“Following today’s rejection by the High Court, Aurizon is now able to progress the $205 million sale of the terminal to Pacific National, pending final approval by the Foreign Investment Review Board.”
Pacific National has already paid $35 million out of the $205m total sale value. Final payment is expected during the second half of the 2021 financial year. In its statement, Pacific National said that with the sale complete, the company’s network of intermodal terminals will continue to assist in the social and economic recovery from COVID-19 by providing essential freight services.
“Pacific National is also actively working to ensure the many and varied benefits of Australian rail freight are incorporated into our nation’s growing freight task, including helping to improve road safety, lower emissions, and reduce traffic congestion and truck ‘wear and tear’ on local and state roads.”