The Australian Competition and Consumer Commission (ACCC) has released its decision to authorise the acquisition of Automotive Holdings Group (AHG) by AP Eagers (APE). The authorisation is subject to AP Eagers’ selling its existing new car dealerships in the Newcastle and Hunter Valley region to a third party.

The decision is particularly interesting because it is the first decision by the ACCC under the new authorisation provision of the Competition and Consumer Act. Under the old provision, an authorisation could only be granted if it could be established that the merger was likely to result in such a benefit to the public that it should be allowed to proceed. Under the new provision, the ACCC can grant an authorisation without consideration of public benefit, providing it is satisfied that the acquisition is unlikely to substantially lessen competition. AP Eagers’ Application did not contain extensive submissions about the likely public benefits of the proposed acquisition.

Frontier Economics was retained by the ACCC to give advice on the likely effects of the merger on competition.   Frontier Economics regularly advises clients on a range of competition matters.

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