ACCC reviews Japanese majors merger

THE ACCC has launched a brief assessment of the NYK Group’s plan to acquire sole control of compatriot NS United Kaiun Kaisha, a proposed deal announced in early August.

NS United was formed in 2010 by the merger of Shinwa Kaiun Kaisha and Nippon Steel Shipping Co Ltd and its bulk carriers and other vessels are constants in Australian trades. NS United Kaiun also has Japanese coastal shipping activities and hauls LPG, grain and steel industry raw materials internationally. It operates 130 ocean-going vessels and 81 coastal vessels.

The company’s current ownership is split between NYK, Nippon Steel (33.36%) and general shareholders (48.29%). The tender offer is expected to take NYK initially to 33.31% or more and will be followed by a share repurchase that will see NYK become the 83.33% owner, with Nippon Steel holding 16.67%. NS United Kaiun will then become a consolidated subsidiary of NYK.

The Commission notes NYK is an integrated logistics enterprise that operates globally with a focus on maritime transportation businesses such as container shipping, dry bulk shipping, car shipping and energy shipping, as well as logistics businesses including warehousing and transportation management.

NS United is part of the NSU Group, a Japanese shipping company whose principal business is the maritime shipping of various dry bulk cargoes, including raw materials for steel, energy resources and food products.

NYK and NS United both supply ocean-going dry bulk carrier shipping services and ocean-going liquefied petroleum gas carrier shipping services.

The ACCC is assessing the impact of the acquisition on competition and is seeking the views of affected parties. It opened the consultation yesterday [27 October] and will close submissions next Tuesday, 3 November.

The ACCC invites submissions or information in response to the following:

• Outline any concerns regarding the impact of the Acquisition on competition in Australia, including if NYK and NS United are close competitors and there are not many alternatives or if one is a major supplier to competitors of the other.
• Provide any additional information or comments that you consider relevant to the ACCC’s assessment of the Acquisition.
• Provide a brief description of your business or organisation, including any commercial relationships with NYK and/or NS United.

"During the ACCC’s assessment of a notified acquisition, the ACCC may receive information that is properly regarded as being confidential and which is provided to the ACCC in confidence. The ACCC is committed to treating this information responsibly and in accordance with the law. The ACCC understands the importance of confidentiality to parties involved in a notified acquisition, as well as to third parties that provide information to the ACCC.

"Submissions or information in response to the questions can be provided via email to mergers@accc.gov.au with the title Submission re: NYK – NS United. The ACCC must complete its assessment within strict statutory timelines which also impacts the time available for consultation.

"If you would prefer to speak to a member of the ACCC case team, please email mergers@accc.gov.au with the title Request for call re: NYK – NS United. Someone from the case team will contact you to find a suitable time for a call," the Commission says.