Australian regulator sees antitrust concerns on Brookfield Asciano buyout

SYDNEY, Oct 15 (Reuters) - Australia's competition regulator
said a proposed A$8.9 billion ($6.50 billion) takeover by
Canada's Brookfield Asset Management BAMa.TO of local port and
rail freight firm Asciano Ltd AIO.AX may hurt competition for
other coal haulage operators.
In a statement on Thursday, the Australian Competition and
Consumer Commission said the deal, the biggest purchase of a
domestic firm by an overseas entity since 2011, would give
Brookfield both the rail network and train operations in certain
locations.
"The ACCC is concerned that the vertical integration will
lead to a substantial lessening of competition in related
markets for the supply of above rail haulage services in
(Western Australia) and Queensland," commission chairman Rod
Sims said, referring to coal haulage networks in two of the
country's eight states.
The statement suggests that, while Brookfield and Asciano
may be required to make changes to the deal or give regulatory
undertakings, the ACCC is unlikely to block it in its entirety.
Asciano has rail freight operations in every Australian state
and stevedoring operations in 40 locations.
Sims said the ACCC regulates rail freight access
arrangements but noted that "where the owner of such
infrastructure vertically integrates with one of a very limited
number of users of the infrastructure, then the ACCC considers
that an access regime may not be capable of averting a
substantial lessening of competition".
Asciano's former parent company, Toll Holdings, agreed to a
A$6.5 billion takeover by Japan Post Holdings IPO-JAPP.T
earlier this year, while larger rail freight provider Aurizon
Holdings AZJ.AX has been seen as a potential takeover target.
ID:nL4N0VS23U
Asciano's shares have traded below Brookfield's offer price
since it first disclosed the Canadian company's approach in
July. On Wednesday, the target's shares rose 2 cents to A$8.53,
below the offer price of A$9.15.
The ACCC said it expects to give a final ruling by Dec. 17.
($1 = 1.3691 Australian dollars)