ACCC delays decision on Graincorp bulk liquid terminals sale

The competition watchdog has pushed back a decision for a second time. The review was triggered by concerns that the purchase by ANZ Terminals would ‘remove a significant competitor’ from the market.

The Australian Competition and Consumer Commission has delayed its decision on GrainCorp’s sale of its Australian Bulk Liquid Terminals division.

GrainCorp announced that it had agreed to sell its ABLT business in March 2019, while it was subject to a takeover bid from Long-Term Asset Partners that was later withdrawn.

The ACCC launched a review of the sale in July over concerns that the deal would “remove a significant competitor in what is an already concentrated industry in New South Wales, Victoria and South Australia.”

The competition watchdog was due to report a final decision by October 17 before extending this to October 31. It has now informed GrainCorp that the decision has been pushed back again to November 15. The sale remains subject to Foreign Investment Review Board approval and other conditions.

The ACCC did not respond to a request to clarify the reason for the delay.

The buyer of the bulk liquid terminals is ANZ Terminals, an independent owner and operator of bulk liquid storage facilities in Australia and New Zealand. Its offer of approximately A$350 million ($240 million; €215 million) represented a multiple of approximately 13 times the subsidiary’s expected fiscal year 2019 EBITDA.

ANZ Terminals counts several infrastructure fund managers and institutional investors among its shareholders. Palisade Investment Partners manages a 32 percent equity stake in ANZ Terminals on behalf of its open-ended Diversified Infrastructure Trust and two unidentified direct mandates, according to a statement made upon acquiring the stake in November 2014.

First Sentier Investors also holds a stake in ANZ Terminals of around 23 percent via its Global Diversified Infrastructure Trust, while Canadian managers Northleaf Capital Partners and Fengate Capital are also known to be shareholders. All acquired their stakes from Macquarie Group in late 2014, with Macquarie Capital then retaining a stake of around 10 percent.

ANZ Terminals owns and operates five terminals in Australia and four in New Zealand, with combined capacity of around 375,000 cubic metres.

The sale of the bulk liquid terminals business is part of GrainCorp’s ongoing portfolio review, which has also seen the firm announce plans to spin off its global malt business into a separate listed entity.

GrainCorp acquired its ABLT business in 2012 as part of its acquisition of edible fats and oils business Gardner Smith. The subsidiary operates eight liquid terminal sites across Australia with a combined storage capacity of approximately 211,000 cubic metres.

The sites store and handle bulk liquid fats, oils, fuels and chemicals for a range of customers, including GrainCorp Oils. As part of the proposed transaction, GrainCorp Oils will enter into a long-term storage agreement with ANZ Terminals.

GrainCorp will publish its 2019 full-year results on November 14.