The Australian Competition and Consumer Commission will not intervene in the proposed acquisition of Howard Smith's Towage assets by Adsteam Marine Limited, ACCC Chairman, Professor Allan Fels, said today.
"The ACCC has examined the likely effect on competition and will not oppose the proposed acquisition", Professor Fels said. The ACCC considered the proposed acquisition under section 50 of the Trade Practices Act 1974 which prohibits acquisitions that would be likely to have the effect of substantially lessening competition in a market.
Adsteam currently has wholly owned towage operations in Port Kembla and various South Australian ports. Howard Smith has wholly owned towage operations in the ports of Melbourne, Westernport and Geelong. Adsteam and Howard Smith also have various joint venture towage operations in Queensland, New South Wales and Western Australia. These joint ventures are mostly operated through separately incorporated entities in which Adsteam and Howard Smith have equal interests and equal director representation. Adsteam is already the managing shareholder of the Western Australian and NSW joint venture towage operations, as well as many of the Queensland joint venture operations.
"Based on Australian ports generally representing separate markets, the proposed acquisition of Howard Smith's Victorian towage operations would represent the transfer of market power from Howard Smith to Adsteam in the ports of Melbourne, Westernport and Geelong", Professor Fels said.
"In the other relevant ports where Adsteam and Howard Smith have joint venture operations, Adsteam is already the managing shareholder of most of these towage operations. It is unlikely that this change in the shareholding of the joint venture towage operation in each relevant port would cause a substantial lessening of competition.