The Rail Tram and Bus Union says it will approve of Brookfield’s takeover of Asciano if the Australian Competition and Consumer Commission regulates freight rail.
In an interview earlier this week with the Australian Financial Review, RTBU national secretary Bob Nanva reportedly told the paper the union would be “more amenable” to the blockbuster foreign takeover deal if the ACCC began to act as a national overseer for freight rail.
Nanva reportedly labelled the current system as a “regulatory dog’s breakfast”.
“Given the scale of future maintenance and further investment that needs to be put into the rail network, companies are going to try and maximise their return on that investment,” Nanva was quoted as saying.
“One way you can do that is by manipulating access arrangements and pricing competitors out of using that infrastructure.”
Nanva suggested a merger of Brookfield Rail and Pacific National, which would effectively take place if Brookfield were to acquire PN parent company Asciano, could lead to some anti-competitive market activity if the ACCC didn’t keep a keen eye on the sector.
“It’s one thing to look for efficiencies by merging two companies, and we’re all for efficiencies, [but] it’s another thing to gouge your competitors so that you can improve your return on investment, and that’s the real risk here.”
The takeover of ASX-listed Asciano by Bermuda-based Brookfield Infrastructure Group received a boost with the change in Canberra in mid-September, with analysts speculating new treasurer Scott Morrison would be more likely to approve a foreign takeover than his predecessor, Joe Hockey, who famously blocked the multi-billion-dollar takeover of GrainCorp by US firm Archer Daniels Midland in 2013.
Brookfield representatives have been in Australia lately to win over the vote of major Asciano shareholders, who will also have to approve the takeover offer, which has been recommended to them by the company’s board of directors.
Brookfield agreed to terms with Asciano – owner of rail business Pacific National and ports business Patrick – after the Bermuda group lobbed a $9.05 per share offer on July 1.
A month after that bid, Asciano’s board announced it had agreed to a cash and scrip offer worth $9.15 a share – 10c more than the initial bid. The board encouraged its shareholders to study the deal, and recommended they accept in due course.