THE Australian Competition and Consumer Commission (ACCC) will appeal the decision of the Australian Competition Tribunal (ACT) to allow Tabcorp Holdings Limited (ASX: TAH) to acquire Tatts Group Limited (ASX: TTS).
The ACT found in June that the merger was likely to generate substantial benefits for the greater public and there would be no material detriment following Tabcorp's acquisition.
The Tribunal's decision, giving the green light for Tabcorp's $11 billion takeover bid, was subject to the condition that Tabcorp would divest its Odyssey gaming business in Queensland.
ACCC chairman Rod Sims says the consumer watchdog is appealing the ACT's decision on three major points of law.
"The ACCC is alleging the Tribunal made three reviewable errors," says Sims.
"It is therefore seeking clarification of these three points of law which are central to the Tribunal's assessment of Tabcorp's proposed acquisition of Tatts."
"We are seeking judicial review because we believe these legal principles are fundamental not only to the Tabcorp decision but to all future merger and non-merger authorisation assessments."
The ACCC's grounds for review in the Federal Court are:
- The ACCC is seeking a review of the Tribunal's reasoning that it could only conclude that the proposed acquisition was likely to result in a detriment if the Tribunal concluded that there would be a substantial lessening of competition.
- The ACCC is also seeking a review of the Tribunal's failure to compare the likely future state of competition both with and without the proposed acquisition in its consideration of whether the proposed acquisition was likely to result in any detriment.
- Finally, the ACCC is seeking review on the ground that the Tribunal made an error in the weight it gave to benefits, such as cost savings and revenue synergies, which would be retained by Tabcorp and not shared with consumers more broadly.
Tabcorp shares are up 1.54 per cent in early trade to $4.30 and Tatts Group shares are up 1.62 per cent to $4.08.
Business News Australia
Get our daily business news
Sign up to our free email news updates.
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support