ACCC to oppose the acquisition of Mobil retail assets by Caltex
The Australian Competition and Consumer Commission (ACCC) has announced that it will oppose the proposed acquisition of Mobil Oil Australia’s retail assets by Caltex Australia Limited. The ACCC gave two reasons for its decision. The first was that the local competition around 53 Mobil retail sites would be likely to be reduced as a result of the acquisition. Graeme Samuel, the chairman of the ACCC, has stated that removing these sites from the deal would not be sufficient for the deal to gain approval from the ACCC. This is because of the second problem that the ACCC identified. This was that the acquisition would increase Caltex’s share of retail sites in the wider Metropolitan areas of Brisbane, Sydney, Melbourne and Adelaide; and, in the opinion of the ACCC, this would increase the stability of the weekly price cycles compared with a situation in which some or all of the sites were acquired by more maverick or aggressive retailers.
Frontier (Australia) was retained by solicitors for Caltex to undertake detailed empirical analysis of the impact on the retail prices of Caltex of concentration in local retail areas.
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