John Durie: Consortium’s Port of Geelong bid collapses in the face of ACCC objections

Brookfield’s $1.2 billion sale of the Port of Geelong to a range of superannuation funds has collapsed after the Australian Competition and Consumer Commission (ACCC) objected to the deal on competition grounds.

The buyers led by Spirit Super and Palisade Investments withdrew from the deal in the face of continued ACCC objections.

It comes amid government pushes for increased superannuation investment in Australia.

Brookfield will now consider its options and is likely to maintain its ownership for at least the immediate future.

This is the first public merger rejection under the new regime at the ACCC under chair Gina Cass-Gottlieb.

She also made clear the ACCC was wary of super funds with minority interests in a range of infrastructure assets.

 “Common fund management and ownership that allow a degree of control or influence by minority interests have the potential to detrimentally effect competition,” Cass-Gottlieb  said in a statement.

 “Superannuation and other investment funds have interests in many of Australia’s critical infrastructure assets. The issue of common fund management and ownership among competing firms, including via minority interests, has increasingly become a focus of economic regulators and most has recently been the subject of a Standing Committee on Economics Inquiry,” she added.

Palisade controls 100% of the Port of Portland — the closest port to Geelong — and proposed management shuffles did not pass muster at the ACCC.

The major investor in the deal was Spirit Super which is the biggest profit-for-member fund in Tasmania.

The state government will be a major user of the port with its government owned daily ferry to the mainland, the Spirit of Tasmania, to be based in Geelong from November after moving from its Port Melbourne base.

Palisade was due to own 25% with another 25% owned by Commonwealth Super and Spirit Super owning 49%.

The ACCC said in a statement it “was concerned that the proposed acquisition may substantially lessen competition in the supply of port services for long-term bulk cargo customers in Victoria by reducing competition between the Port of Portland and Port of Geelong“.

The two ports handle over half of Victoria’s bulk cargo.