ACCC approves $13bn APA takeover
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The competition watchdog has approved a Hong Kong consortium's $13 billion takeover bid for APA Group, Australia's biggest gas pipeline company, on the proviso that four major assets in Western Australia are sold to new owners.
The Australian Competition and Consumer Commission granted its approval after the CK Group addressed competition concerns by pledging to sell-off APA's WA assets.
CK Group already owns DBP, which operates the Dampier Bunbury Pipeline.
The deal will make CK Group, led by CK Infrastructure Holdings, the biggest pipeline player on the nation's east coast.
But the deal still needs clearance from the federal government's Foreign Investment Review Board.
The ACCC had expressed its concern the $12.98 billion acquisition would give CK Group a monopoly grip on most gas transmission and storage facilities in the west.
But in a statement issued on Wednesday, ACCC chair Rod Sims said the group's undertaking to divest its WA acquisitions had addressed anti-competition worries.
"The undertaking addresses these concerns and creates an opportunity for a new operator to acquire a valuable set of assets, together with the personnel needed to operate and manage the assets," he said.
Mr Sims said CK Group had only a small number of gas pipelines supplying small, regional centres and customers on the east coast.
"Concerns raised by industry participants mostly related to APA's pre-existing dominance in gas transmission," he said.
"Outside of WA, the CK Consortium has only minor gas transmission assets."
The group will offload the Parmelia Gas Pipeline, the Goldfields Gas Pipeline, the Kalgoorlie to Kambalda Pipeline, and the Mondarra gas storage facility.
The ACCC will have final say on the purchaser, which Mr Sims said must be an effective and long-term competitor for the development of new pipelines.
APA's stapled securities were trading up 11 cents, or 1.1 per cent, at $9.88 at 1058 AEST.