Palisade, Spirit Super drop A$1.2bn Port of Geelong deal

The consortium has walked away from the acquisition of the major port as a result of the Australian Competition and Consumer Commission’s competition concerns regarding the deal.

Sydney-based asset manager Palisade Investment Partners and Tasmanian superannuation fund Spirit Super have abandoned their A$1.2 billion ($822 million; €829 million) bid to acquire the Port of Geelong.

The consortium’s successful bid to buy the port, which is the largest bulk port in the Australian state of Victoria, from Brookfield Asset Management and State Super was announced in January and expected to close in the first quarter of this year. Following a prolonged review by the Australian Competition and Consumer Commission however, the consortium has decided not to proceed with the acquisition.

In a statement announcing the deal had fallen through, the commission said: “[The consortium] has withdrawn its request for merger clearance from the ACCC for its proposed acquisition of the Port of Geelong.”

“The ACCC recently informed the consortium that it continued to hold preliminary competition concerns needing more time to investigate and the consortium subsequently decided to not proceed with the transaction.”

On 31 March, the ACCC issued preliminary competition concerns regarding the deal – which would have seen Palisade acquire a 49 percent stake in the Port of Geelong via its open-end Diversified Infrastructure Fund, with Spirit Super set to acquire the remaining 51 percent – with a final decision from the commission expected on 9 June.

At the time, the ACCC flagged Palisade’s 100 percent interest in another bulk port in Victoria, the Port of Portland, noting that the proposed acquisition would lead to common ownership between Port of Geelong and Port of Portland, potentially resulting in a significant lessening of competition between ports.

Announcing the consortium’s decision to walk away from the deal, ACCC Chair Gina Cass-Gottlieb said in a statement: “Common fund management and ownership that allow a degree of control or influence by minority interests have the potential to detrimentally [affect] competition… Parties proposing to acquire interests in critical infrastructure should expect the ACCC’s review will be careful and thorough.”

Palisade was contacted for comment but could not be reached in time for publication. Speaking to Infrastructure Investor in April, Palisade executive director Alastair Pollock said: “We are continuing to work with the ACCC on their process and remain confident that the transaction will be cleared.”

“Spirit Super is disappointed that no decision could be made within the timeframe,” a spokesperson for the super fund told Infrastructure Investor.

The port attracted interest from several parties when it was put on the market by equal owners Brookfield and State Super last year, with First Sentier Investors reported by the Australian Financial Review to be among those interested in the asset.