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MELBOURNE - Toll Holdings Ltd will split its logistics and infrastructure assets into two separate companies after the Australian competition watchdog gave the green light to the plan.
The Australian Competition and Consumer Commission (ACCC) yesterday agreed to variations of undertakings given by Toll to secure approval for its A$6 ($6.81) billion-plus takeover of stevedore Patrick Corp, opening the way for the split.
Toll said the new infrastructure company, which will be be listed on the stock exchange, would be called Asciano Ltd and hold assets worth more than A$8 billion.
The logistics assets will remain under the Toll Holdings banner. Toll NZ, the road rail and shipping operator in New Zealand, remains part of Toll Holdings.
Toll had asked the ACCC to vary the undertakings - given in March 2006 to address competition concerns - in December 2006 when it proposed the plan.
"I am pleased that Toll and the ACCC have agreed on an acceptable set of undertakings that have addressed the commission's competition concerns while allowing Toll to preserve the strategic and financial benefits of the restructure," Toll managing director Paul Little said.
"Toll continues to believe that the restructure plan unlocks significant shareholder value and allows for Toll and Asciano to accelerate growth."
Toll said plans for the restructure were proceeding, with a scheme booklet expected to be sent to all Toll shareholders in late April and a shareholder vote to take place in late May.
Asciano will own Patrick and rail operator Pacific National, which was jointly owned by Toll and Patrick until Toll's takeover of Patrick last year, and is due to be listed in mid-June.
Toll executive director Mark Rowsthorn will become chief executive and Hastings Fund Management Ltd managing director Tim Poole is expected to become chairman.
"The significant scale of Asciano positions it well to venture into overseas markets and to grow its existing high quality transport infrastructure portfolio," Mr Rowsthorn said.
The ACCC said today that it had consented to the variations to Toll's undertakings as long as there was a clean break between the logistics and infrastructure assets into two separate and unrelated companies.
Under the variations, Toll will be relieved of its prior obligation to divest the its vehicle transport business and interest in PrixCar.
It will also be relieved of its commitment to divest a 50 per cent interest in Pacific National, which will now be wholly owned by Asciano.
Obligations to make available a "starter's kit" of rail assets on Australia's east-west rail corridor and not to discriminate in the operation of Pacific National or at Patrick's container terminals remain in place, and will be assumed by Asciano under the restructure.
"The ACCC's market inquiries revealed that there are competitive benefits in retaining the obligation to divest the starter's kit and the rail and ports non-discrimination regimes," ACCC chairman Graeme Samuel said.
Mr Samuel said the ACCC's market inquiries indicated that the restructure of Toll's business, compared to enforcement of the original undertakings, would benefit competition.
But he said Toll and Asciano would have to meet new obligations designed to facilitate a complete and clean break between the two.
These obligations prohibited joint ventures, cross shareholdings between Toll and Asciano, and required directors of Toll and Asciano to be independent of the other company.
Messrs Little and Rowsthorn would sell down their existing interests in the other company.
If Toll fails to comply with its obligations to maintain its independence from Asciano, it will have to sell the vehicle transport business and the PrixCar interest.
- AAP
