Oz Watchdog Greenlights CKI’s Takeover of APA

Australia’s competition watchdog has greenlit the proposed acquisition of the country’s largest gas infrastructure company APA Group by a consortium led by Hong Kong-based CK Infrastructure Holdings, APA said August 12.

The Australian Competition and Consumer Commission (ACCC) accepted a court-enforceable undertaking from the CK Consortium to divest significant gas assets in Western Australia, which quelled its concerns about the impact from the takeover to competition within the state.

“The ACCC was concerned about the removal of the CK Consortium as a competitor in relation to new pipeline development. The ACCC was also concerned about gas transmission and storage services in Western Australia given that, without the undertaking, the CK Consortium would own most gas transmission and storage facilities in the west,” the watchdog said.

The ACCC said the undertaking addresses the concerns and creates an opportunity for a new operator to acquire the assets, which include the Parmelia, Goldfields, Kalgoorlie-Kambalda gas pipelines as well as the Mondarra gas storage facility. “This will create an operator similar in size to the CK Consortium’s current operations in Western Australia,” ACCC’s chair Rod Sims said.

In eastern Australia, the CK Consortium has a limited number of gas transmission pipelines supplying small regional centres or specific customers with no competition between its existing eastern assets and those of APA, the watchdog noted.

The A$13 billion ($9.8bn) takeover offer was first announce in June this year.

“The Schemes remain subject to certain conditions, including approval from the Foreign Investment Review Board and approvals from APA Securityholders and the Supreme Court of New South Wales,” APA said.