ACCC won’t block Elders’ $187m AIRR tilt

The competition watchdog says it has no reason to block Elders’ proposed $187 million cash-and-scrip takeover of wholesale buyer Australian Independent Rural Retailers.

The ACCC on Thursday said it had examined the proposed transaction closely and decided other independent rural stores would not necessarily suffer.

“Market feedback suggested that most independent retailers consider they have sufficient alternative supply options if Elders attempted to discriminate against them,” ACCC deputy chair Mick Keogh said.

“It also appears that existing or potential new buying groups or wholesalers could expand in response to any future change in AIRR’s offering.”

Elders currently has minimal operations in wholesaling to independent rural retail stores, while AIRR is an important wholesaler to nearly 2,000 independent rural stores, but has minimal assets of its own in rural retailing.

AIRR has five retail operations in Vcitoria and last year acquired The Hunter River Company, which makes products for cattle, sheep and equine health.

Elders has said AIRR was expected to generate earnings before tax of $21.9 million for the 12 months to September 2019.

Shares in Elders were worth $6.78 before the open of markets on Thursday, down 2.4 per cent from $6.95 a year ago.

Meanwhile, Mr Keogh said the ACCC would continue to monitor the rural sector, which he noted had increasingly consolidated in recent years.

This month, Ruralco shareholders overwhelmingly voted in favour of a $469 million takeover by Canadian fertiliser giant Nutrien – which owns the Landmark brand in Australia.

The ACCC had allowed the merger to proceed after Nutrien agreed to divest three rural merchandise stores to ease competition concerns.


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