GrainCorp sale hits a hurdle
AGRICULTURAL heavyweight GrainCorp has suffered a setback in its plan to sell one of its businesses to a rival operator for $350 million.
GrainCorp’s deal to sell its bulk liquid terminals business to ANZ Terminals is in danger of being scotched by the competition watchdog.
The Australian Competition and Consumer Commission has released a statement of issues outlining reservations about the sale of GrainCorp Liquid Terminals Australia.
It has concerns about the impact of the deal on the market for the storage and transport of liquids including edible oils, tallow and nonflammable industrial chemicals, and base oils.
In March, GrainCorp announced it had agreed to sell the business unit for $350 million. It said that through the deal, it was “releasing capital and unlocking significant value for our shareholders”.
At the time, GrainCorp managing director Mark Palmquist said ANZ Terminals was an experienced operator.
The companies would put in place a long-term agreement that allowed GrainCorp “ongoing and secure access to the storage needed to support our oils business”.
In a statement, ACCC chair Rod Sims said the preliminary view was that the deal “will remove a significant competitor in what is an already concentrated industry in NSW, Victoria, and South Australia”.
“We are also considering the impact on competition in the east coast states more broadly,” Mr Sims said.
The ACCC’s final decision is scheduled for October 17.