ACCC Consults Proposed Revised Offer By Brookfield For Asciano

(RTTNews) - The Australian Competition and Consumer Commission said that it has commenced market consultation on proposed revised undertakings offered by a consortium assembled by Brookfield Asset Management Inc. that includes Brookfield Infrastructure Partners LP (BIP, BIP_U.TO) in relation to the proposed acquisition of Asciano Limited (AIO.AX).

Under the revised proposal, Brookfield commits to divest to an independent party, Pacific National's intermodal business, which operates the interstate freight service around Australia, and Pacific National's limited bulk rail operations in Western Australia; and to ensure independent operation and decision making at Brookfield's Dalrymple Bay Coal Terminal.

The revised undertakings have been proposed to address the preliminary competition concerns identified by the ACCC in the Statement of Issues released on 15 October 2015.

While the ACCC has decided to publicly consult on whether the undertakings will be satisfactory to address the ACCC's preliminary competition concerns, this should not be interpreted to mean that these or any other form of undertakings will ultimately be accepted.

This is the second undertaking remedy proposed by Brookfield following the release of the ACCC's Statement of Issues. The initial undertakings offered to the ACCC relied solely on behavioural commitments by Brookfield not to engage in certain behaviour to address the vertical competition concerns. These were rejected by the ACCC on 26 November 2015 after careful consideration of the likely effectiveness and enforceability of the proposed undertakings.

On 14 December 2015, the ACCC suspended its timeline at the request of Brookfield in order to allow a revised undertaking proposal to be considered. In the absence of this, the ACCC would have made a final decision on the transaction on 17 December 2015 as scheduled. Each new undertaking proposal put forward by merger parties requires the ACCC to examine and consider the proposal and will therefore inevitably delay the ACCC's final decision.

The ACCC now seeks views from market participants to assist the ACCC to determine whether the revised undertakings would be likely to alleviate the ACCC's competition concerns.

The ACCC noted that the Parties wishing to make submissions should do so by 22 January 2016.

Following market consultation, the ACCC will decide whether to accept or reject the proposed undertakings. The ACCC anticipates making its final decision on the revised undertakings by 18 February 2016 in conjunction with the ACCC's final decision in relation to Brookfield's proposed acquisition.