The ACCC will not oppose Elders Limited’s proposed acquisition of Delta Agribusiness after accepting a court-enforceable undertaking that commits Elders to divest six Delta stores in Western Australia.
Elders and Delta both supply rural merchandise such as agricultural chemicals, seed, fertiliser, animal health products and related services, such as agronomy services, through their retail networks.
Both companies also supply rural merchandise at the wholesale level.
“Our review closely considered the likely effect of the proposed acquisition on competition in each local area where both Elders and Delta have a retail store, taking into account the specifics of each local area,” ACCC deputy chair Mick Keogh says.
“We examined the strength of competing retailers, the particular geographic features and size and type of farms, among other factors,” he says.
“We also engaged with a range of stakeholders including farmers, competing retailers, wholesale suppliers, buying groups and industry bodies as part of our review.
“The nature of competition in the retail supply of rural merchandise is more localised than is the case in other retail sectors, partly due to the differences in farming in different local areas, and the importance of local relationships.
“Following an in-depth review, we were concerned the proposed acquisition would be likely to substantially lessen competition in several local areas in Western Australia.”
To address these concerns, Elders has undertaken to divest six Delta stores in Western Australia, and the ACCC has accepted that.
The ACCC considered, and has approved, Independent Rural Pty Ltd as the purchaser for Delta stores in Dalwallinu and Kalannie, and EE Muir & Sons Pty Limited (Muirs) as the purchaser for Delta stores in Albany, Hyden, Manypeaks and Wellstead.
“The ACCC considers that the undertaking provided by Elders addresses the competition concerns that would otherwise arise from the proposed acquisition. Independent Rural’s and Muirs’ acquisition of Delta stores in each of these local areas will create a strong, independent and viable long-term competitor to Elders in those six areas,” Mick says.
The ACCC concluded the proposed acquisition is unlikely to substantially lessen competition in the retail supply of rural merchandise in other local areas where both Elders and Delta own retail stores.
In its Statement of Issues, the ACCC also identified potential competition concerns in the retail supply of rural merchandise at a broader regional, state or national level, and in the wholesale supply of rural merchandise in Western Australia.
Having reviewed additional information and engaged in further market inquiries, the ACCC considers the proposed acquisition is unlikely to substantially lessen competition in the retail supply of rural merchandise at a broader regional, state or national level, or in the wholesale supply of rural merchandise in Western Australia.
“Ultimately, the ACCC did not consider that the proposed acquisition was likely to substantially lessen competition in any relevant market with the undertaking provided by Elders,” Mr Keogh said.
Further information, including the undertaking accepted by the ACCC, can be found on the ACCC’s public register at accc.gov.au/public-registers/mergers-and-acquisitions-registers/public-informal-merger-reviews-register/elders-limited-delta-agribusiness
