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Merger authorisations

Print Friendly and PDFApplication for Merger Authorisation by
AGL Energy Ltd

Australian Competition Tribunal
Authorisation Application
Authorisation granted

Summary

On 12 February 2014 AGL announced it had entered into an agreement with the NSW Government to acquire Macquarie Generation assets for $1,505 million. The acquisition was conditional on approval by the ACCC.

AGL applied to the ACCC for informal clearance of its proposed takeover of Macquarie Generation in 2014. AGL claimed that

"there is a strong factual basis to demonstrate that the acquisition of Macgen will not result in a substantial lessening of competition. AGL does not currently own any significant generation assets in New South Wales where the two largest electricity retailers, Origin Energy and Energy Australia, already own substantial generation assets acquired as a result of transactions previously approved by the ACCC. AGL also understands that the New South Wales Government’s bid selection process had regard to the effects of the sale on market competition in the State before making its decision to proceed with a conditional sale to AGL"

In late March the ACCC refused to grant informal clearance, concluding that:

"“The proposed acquisition would result in the largest source of generation capacity in NSW being owned by one of the three largest retailers in NSW. Indeed, with this acquisition, the three largest retailers in NSW would own a combined share of 70 to 80 per cent of electricity generation capacity or output. This is likely to raise barriers to entry and expansion for other electricity retailers in NSW and therefore reduce competition compared to the situation if the proposed acquisition does not proceed ..." (source: Press release)

On 24 March 2014 AGL applied to the Tribunal for authorisation of the proposed deal.

On 25 June 2014 the Tribunal authorised the proposed acquisition. View Tribunal decision (Application for Authorisation of Acquisition of Macquarie Generation by AGL Energy Limited [2014] ACompT 1).

On 24 July 2014 the ACCC announced it would not appeal the Tribunals' decision.

 

Key documents

Key documents can be found on the Tribunal's authorisation page. They include:

 

Commentary

Journal articles

Post-Tribunal decision

Pre-Tribunal decision