The Independent Consumer and Competition Commission has proposed to decline authorising China Navigation Company Pte. Ltd to proceed with acquiring New Pacific Line Pte Ltd.
CNCo has applied to the ICCC for either clearance or authorisation to acquire NewPac (the proposed acquisition).
In making the application, CNCo argued that the acquisition should be allowed to proceed under the ICCC Act because it will not lessen competition; and it will result in more benefits to the public in terms of increasing efficiency and rationalisation, reducing port congestions and reducing emission of greenhouse gas and sulphuric acid.
CNCo and NewPac compete in providing international shipping liner services to and from PNG. CNCo is wholly owned by the Swire Group, who also has majority shares in Steamships Trading Company who then has majority interest in Consort Express Lines.
Consort and Steamships also have direct or indirect interests in other businesses that operate shipping related services such as stevedoring and/or handling services, and others.
Commissioner and Chief Executive Officer of the ICCC, Paulus Ain, said: “The ICCC assessed CNCo's clearance application and taking into consideration available information about Swire's business interest in the domestic shipping industry, was not satisfied that the proposed acquisition, if it proceeds, will not lessen competition. The ICCC therefore declined giving clearance for the acquisition to proceed. The ICCC then proceeded to assess the application for authorisation.”
In considering the application for authorisation, the ICCC took into account all the public benefit claims or arguments of CNCo and other stakeholders’ comments to arrive at this draft decision.
Commissioner Ain said: "Based on the available information and submissions made by CNCo, whilst acknowledging that there are some short term benefits, the ICCC is not satisfied that, overall, the proposed acquisition will result, or will be likely to result, in such a benefit to the public that would outweigh the likely effects of substantial lessening of competition.
“The ICCC has therefore issued its draft decision to decline authorising the acquisition.”
As part of releasing the draft determination, the ICCC will be holding a conference to give opportunity to stakeholders and interested persons to openly comment on the draft determination.
The conference will be held on 22nd November, 2018. All relevant stakeholders will be notified in writing of the full details of the conference in due course.
Commissioner Ain said: “Whilst it is not required to hold a conference, to be more transparent in its decision (in this application), the ICCC has decided to hold this conference to give CNCo and other stakeholders the opportunity to comment on the draft determination before the determination is released.”
A list of issues for comments were also sent out to the stakeholders. Attendance and participation of the stakeholders and the relevant parties is paramount as the ICCC will consider any vital comments made during the conference and incorporate them when finalising its determination.
The ICCC's draft authorisation determination can be obtained from the ICCC head office (located at Garden City Building, First floor, Boroko, Port Moresby) upon request or access a soft copy on their website: www.iccc.gov.pg.
If you wish to confirm your attendance and participation at the conference, or if you have any queries on this application, contact Steven Sugl, executive manager, or Emmanuel Auru, manager mergers & acquisitions, on 3252144.
(Commissioner and Chief Executive Officer of the ICCC, Paulus Ain)