The Australian Competition and Consumer Commission will not oppose the acquisition of BT Registries by Computershare.
Computershare approached the ACCC in March year regarding its proposed acquisition of BT Registries.
Computershare is the largest provider and BT Registries is the third largest provider of registry services to publicly listed companies in Australia.
Both BT Registries and Computershare provide registry services on their own IT platform that involves the provision and maintenance of computer hardware, software and computer databases of information and related services. The IT platform required to provide registry services is commonly referred to as computer bureau services or bureau services.
"The ACCC has conducted extensive market inquiries into this proposed acquisition consulting with competitors, customers and prospective customers of the merged entity", Mr Ross Jones, Commissioner for Mergers, said today. "Competition concerns in regard to the market for bureau services were mitigated by the fact that ASX Perpetual Registrars is developing its own bureau services capability that is expected to be ready later in the year. ASX Perpetual Registrars is the second largest provider of share registry services in Australia whose customers include companies with some of the biggest share registries such as the NRMA and Telstra.
"In regard to registry services, the ACCC found that BT Registries was weakening in its ability to remain as a vigorous and effective provider of registry services. Material gathered during the course of market inquiries suggests that BT Registries has been losing market share and would continue to do so in the face of continuing strong competition from Computershare and ASX Perpetual Registrars.
"BT Registries is unlikely to remain as a viable stand-alone business in the medium to long term without a significant upgrade of its information technology systems, and is currently making loses of $7 million per annum. Given the relatively small customer base of BT Registries in comparison to the two largest providers of share registry services in Australia, BT Registries lacks sufficient scale and the customer base over which to spread the cost of a major information technology upgrade and still remain competitive in the market place.
"BT Registries only has a market share of around 6.5 per cent of the Australian share registry market.
"In addition, the ACCC has found that the entry of ASX Perpetual Registrars into the market for bureau services is expected to reinvigorate competition in the market for the provision of registry services.
"Under these circumstances, the ACCC did not believe that an incremental increase in the market share of Computershare would constitute a significant diminution in level of competition in the market for registry services".