Toll Holdings Limited - proposed acquisition of Mitchell Corp Australia Pty Limited

Summary

Toll Holdings Limited proposed acquisition 100% of the issued share capital in Mitchell Corp.

Market definition

The ACCC considered whether the proposed acquisition would substantially lessen competition in the following markets in WA, and in New South Wales / Queensland:

- bulk resource transportation services by road;
- dangerous goods transportation services by road; and
- hydrocarbon transportation services by road.

While the ACCC considered the proposed acquisition in respect of large regional markets, it is possible that the markets are smaller in size. However, the ACCC considered that it was unnecessary for the purposes of assessing the proposed acquisition's effect on competition to reach a concluded view on the geographic scope of the markets.

Competition analysis

The ACCC considered that the proposed acquisition was unlikely to substantially lessen competition in the relevant markets for the following reasons:

- there is minimal overlap between the parties in each of the relevant markets - Toll's operations are largely based in New South Wales and Queensland (with a smaller presence in WA) while Mitchell's operations are largely based in WA;
- there are a number of alternative suppliers in each of the relevant markets that are likely to act as a competitive constraint post acquisition; and
- barriers to entry are likely to be insufficient to prevent new entry as customers of transport services possess a degree of countervailing power so that they are likely to be able to assist new entry or expansion in the event of a price rise.