16/05/2008 - The Australian Competition and Consumer Commission (ACCC) has cleared fertiliser maker Incitec Pivot Ltd's proposed $3.3 billion takeover of explosives firm Dyno Nobel Ltd.
"After conducting extensive market inquiries, the ACCC concluded that the proposed acquisition would not be likely to substantially lessen competition in the manufacture and supply of ammonia, ammonium nitrate or fertiliser products," ACCC chairman Graeme Samuel said on Thursday.
The ACCC noted that Dyno Nobel had a stake in ammonium nitrate producer Queensland Nitrates Pty Ltd (QNP), a joint venture with West Australian fertiliser and ammonium nitrate maker CSBP Ltd.
The ACCC said that ammonium nitrate was a key input to the supply of explosives but no longer a significant input to fertiliser production in Australia.
Incitec makes fertiliser, predominantly in eastern Australia.
"The ACCC recognised that Incitec and CSBP would be partners in the QNP joint venture for ammonium nitrate production whilst currently competing to a limited extent in the supply of fertiliser products to Australian customers," Samuel said.
"Moreover, the ACCC's market inquiries suggested that there is a potential for increased competition in future between CSBP and Incitec in fertilisers.
"However, the ACCC considered that Incitec and CSBP's participation in the QNP joint venture would be insufficient to increase the ability and incentive for them to engage in coordinated conduct in the supply of fertiliser products."
The ACCC found that the combination of Incitec and Dyno was unlikely to remove an actual or potential competitor in the supply of ammonia and ammonium nitrate.
Incitec, which is offering 0.01406 Incitec shares and 70 cents cash per Dyno share, expects to complete its proposed acquisition of Dyno in mid-June.
The board of Dyno Nobel has recommended that Dyno Nobel shareholders vote in favour of a scheme of arrangement to implement the acquisition by Incitec, at a meeting next week.
Source: AAP NewsWire
