Australian Regulator Has Concerns With Aurizon’s $2.3B One Rail Bid

The competition watchdog has raised concerns about Aurizon’s proposed $2.35 billion acquisition of freight haulage group One Rail, arguing it could “substantially” reduce competition in the rail industry.

“By reducing the number of competitors in the supply of coal haulage in NSW and Queensland from three to two and removing an important competitor to Pacific National and Aurizon, we have preliminary concerns that the proposed acquisition of One Rail by Aurizon would be likely to substantially lessen competition,” said Australian Competition and Consumer Commission (ACCC) chairman Gina Cass-Gottlieb.

Aurizon announced plans to buy One Rail – which was formerly known as Genesee and Wyoming Australia – in October to diversify away from its core business of hauling coal.

Its exposure to coal has deterred investors who are reluctant to buy stock in companies with high exposure to the commodity.

Although One Rail’s operations include coal haulage (mostly thermal coal) in NSW and Queensland, it also has bulk haulage businesses that shift grain, copper, iron ore and other commodities in several states.

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