Today, Justices Yates, Buchanan and Finn rejected the
ACCC's appeal in Metcash Trading Limited's
acquisition of the Franklins assets from Pick n Pay.
As reported by Norton Rose Australia on 25 August 2011, the
Federal Court handed down its decision in the Australian
Competition and Consumer Commission's (ACCC's)
application to prevent the acquisition by Metcash Trading limited
(Metcash) of all of the shares in Interfrank Group Holdings Pty
Limited (Franklins) (proposed acquisition). Justice Emmett held
that the ACCC had failed in its quest to show that the proposed
acquisition would likely result in a substantial lessening of
competition under section 50 of the Competition and Consumer Act
The Chairman of the ACCC announced on 9 September 2011 that it
was appealing the decision of the Federal Court for two reasons:
first, because of the adverse effect the proposed acquisition would
have on independent supermarket retailers, consumers and
competition in the NSW and ACT grocery sector through
Metcash's ability to increase prices and/or reduce service
to independent supermarket retailers post the proposed acquisition,
and second, because the ACCC was of the view that if the decision
was left unchallenged, the Court's interpretation of some
"fundamental principles of merger analysis could have serious
implications for the ACCC's ability to block
anti-competitive mergers and so protect consumers in the
The ACCC failed in its interlocutory injunction application to
prevent the parties from completing prior to the decision of the
Full Federal Court being handed down. On 30 September 2011, Metcash
completed the transaction to purchase the Franklins chain of
supermarkets from Pick n Pay Retailers (Pty) Limited,
notwithstanding the ACCC's pending appeal.
Justice Yates handed down the full court's decision
dismissing the appeal. The ACCC was ordered to pay the costs of
Metcash and Pick n Pay. No reasons were given by the court at this
As there are few ACCC informal merger clearance decisions tested
before the Federal Court, once reasons become available , we will
assess the implications of the decision and comment further, as the
reasons for the Metcash decision will potentially have a bearing on
the way in which merger clearances are assessed by the ACCC in the
1At the time of writing this release the
reasons for the decision were not publically available.
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