Logistics service provider Qube (ASX:QUB) has been slapped with an investigation by the competition watchdog into the company’s $90 million spending spree to acquire Newcastle Agri Terminal.
The deal went ahead before the watchdog gave its tick of approval on potential competition concerns. ACCC chair Rod Sims said “it is worrying when a major vertically integrated player pays $90 million for key infrastructure used for the export of agricultural products without first obtaining the ACCC’s view on whether the proposed acquisition is likely to have the effect of substantially lessening competition.”
He went on to say “our investigation will focus on the impact of the acquisition on the supply chain for bulk grain export through the Port of Newcastle, and the ability and incentive for Qube to discriminate against rivals”.
Qube Logistics owns and operates up-country grain storage sites at Narromine and Coonamble, and supplies rail haulage in NSW. It also owns and operates the Quattro bulk grain terminal in Port Kembla, NSW.
Newcastle Agri Terminal is a bulk grain terminal at the Port of Newcastle. The terminal is one of two bulk grain terminals located at the Port of Newcastle servicing export grain from farms and storage in northern NSW.
Qube’s spokesperson said “we are disappointed that the ACCC has chosen to continue with this inquiry. Qube advised the ACCC of the transaction in early September. Qube has also worked closely and constructively with the ACCC’s grain monitoring unit over a number of years. However, the commercial arrangements between the parties did not allow for any further delay in completion of the transaction. Qube believes the transaction does not raise material competition issues however will continue to provide every assistance to the Commission to allow it to complete its inquiries”.
Shares in Qube (ASX:QUB) are trading 0.9 per cent lower at $3.26.