On 18 April 2007 the ACCC consented to a variation of Toll Holdings’ undertakings, allowing Toll Holdings (Toll) to split into two separately listed entities – Toll (a logistics company) and Asciano (an infrastructure company).
Toll had offered the original undertakings in March 2006 to address the ACCC’s competition concerns about Toll’s proposed acquisition of Patrick Corporation.
The recently-accepted division of Toll relieves the company of several of its original obligations, but also creates new ones.
Toll no longer has to divest:
- its vehicle transport business, its PrixCar interest, or 50 per cent of rail company Pacific National (since Asciano will own Pacific National after the split).
To ensure a ‘clean break’ between Toll and Asciano, the ACCC has required new obligations such as:
- prohibition of joint ventures and cross shareholdings between Toll and Asciano, and personal undertakings from the directors of both companies to meet certain standards of independence.
Furthermore, some of the old obligations from the original undertakings remain:
- Asciano has assumed Toll’s obligations to divest the ‘Starter’s Kit’ of East West Rail assets, and not to discriminate in favour of Pacific National and Patrick Corporation’s container terminals.
The new and revised undertakings for Toll and Asciano also include ‘information clauses’, which the ACCC has promised to include in all future undertakings. These clauses enable the ACCC to gather documents and interview employees to ensure compliance with undertakings. If Toll and Asciano fail to comply with their obligations to maintain a ‘clean break’, the ACCC will enforce the original undertakings and require divestiture of the vehicle transport business, the PrixCar interest, and 50 per cent of Pacific National.
This may finally bring an end to the process that began in August 2005, when Toll first announced its intention to acquire Patrick Corporation.
More information
For information regarding possible implications for your business, contact a member of the Competition & Market Regulation team.