Australian Regulator Queries Toll Sale
Australia's anti-trust regulator on Thursday raised concerns about Toll Holdings Ltd's planned sale of a regional shipping business to an Australian rival, warning it may increase freight costs for disadvantaged customers.
The Australian Competition and Consumer Commission said the planned A$45 million ($35 million) sale of Toll Marine Logistics to Cairns-based Sea Swift could have serious consequences for remote communities in northern Australia.
"The ACCC is concerned that the proposed acquisition is likely to substantially lessen competition in the supply of marine freight services in the Northern Territory and Queensland, including the Torres Strait Islands," ACCC Chairman Rod Sims said in a statement.
The sale may lead to "significantly higher prices and diminished service levels, which may harm standards of living in the remote communities that are dependent upon sea freight".
The commission's warning came a day after Toll, the country's No. 1 logistics firm, said it had agreed to a A$6.5 billion takeover offer from Japan Post <IPO-JAPP.T>, in what would be the fifth-biggest inbound acquisition in Australian history.
A Toll spokesman said it was "not economically sustainable" for two full-service operators to continue to do business in the region. He added that the sale of Toll Marine Logistics had no bearing on the Japan Post takeover proposal, which also requires regulatory approval.
Toll said in November that it was exiting the sea freight business in northern Queensland state and the Northern Territory as part of a broader plan to cut costs.
The commission called for submissions and said it would announce a final decision on April 16.
Toll shares, which rose 47 percent on Wednesday following news of the Japan Post deal, fell 0.5 percent to A$8.91, just short of the Japanese firm's A$9.04 offer price, in line with the broader market.
($1 = 1.2796 Australian dollars)
Copyright Reuters 2015.