The Canadian group Dye & Durham Corporation is trying to avoid an outright rejection by the competition regulator, the ACCC, of its proposed $2.47 billion acquisition of Link Administration Holdings.
Faced with an impending refusal from the Commission, which expressed its reservations in a lengthy statement in June, Dye and Durham (D&D) are now offering a judicial undertaking to sell key assets to eliminate any potential anti-competitive situation.
Accordingly, the ACCC is now seeking industry input on the legally enforceable undertaking proposed by D&D.
“The proposed undertaking would require D&D to divest its entire Australian business to an ACCC-approved buyer. This divestiture would include the SAI Global and GlobalX businesses that D&D acquired in 2021 and would exclude the GlobalX UK business,” a revealed the Commission in its press release on Thursday.
The sticking point for the ACCC is Link’s 42.77% stake in the PEXA Group, which operates an electronic filing network that facilitates digital transfer settlements.
“D&D and PEXA are players in the conveyancing industry, which is in a period of transition towards electronic transfer and digitization,” the Commission explained.
On June 16, the Commission published a Statement of Issues outlining its main preliminary competition concerns following the potential vertical integration of D&D and PEXA’s businesses.
“D&D’s proposed divestiture commitment seeks to address competition concerns by removing potential vertical integration between D&D and PEXA,” ACCC Chair Gina Cass-Gottlieb said Thursday.
“To accept D&D’s proposed undertaking, we must be satisfied that it will effectively address all competition concerns, but is also structured in a reliable and workable manner,” Cass-Gottlieb said.
“We are seeking input from market participants and other stakeholders on whether this commitment will adequately address competition concerns,” Ms Cass-Gottlieb said.
“This public consultation should not be taken as a signal that the ACCC will ultimately accept the proposed divestiture commitments and will not oppose the transaction.”
Bond shares rose 1.3% on Thursday to end at $4.46.
The ACCC’s announcement came less than a day after D&D lost a major (and similar) case in the UK where it was ordered by the country’s competition regulator to sell a company in the field. transfer of ownership which had raised concerns about market dominance.
Britain’s Competition and Markets Authority said on Wednesday that Canadian firm Dye & Durham had to sell a company called TM Group due to competition concerns.
Dye and Durham paid £91.5million for TM Group last July.
The British authority said the Canadian company was to sell TM Group – a provider of property tracing and conveyancing services – after an investigation that began last October and then deepened in December.
The Authority said the acquisition of TM Group by Dye & Durham significantly reduced competition in the provision of property search services in England and Wales.
He said the merger would reduce competition and could lead to less innovation, higher prices and lower quality services in the market.
“The companies were close rivals before the merger and the evidence shows that the combined company would be the largest supplier in the market,” the organization said.
“The CMA also found that the merger would leave only two other large national providers in the market and that competition from smaller providers would not compensate for the competition lost by the merger.”
It has now concluded that to remedy this loss, Dye & Durham must sell TM Group to a suitable buyer to be approved by the CMA.
Unless she can get a binding recognizance in Australia, the offer for Link seems dead.