Australia regulator raises concerns over Olam's $97 mln bid for Namoi Cotton (updated)

Namoi Cotton

20/06/2024 24:51

(Writes through with further details from paragraph 2 onwards)
       June 20 (Reuters) - Australia's competition regulator
said on Thursday the proposed acquisition of Namoi Cotton
 NAM.AX  by Singapore's Olam Agri  IPO-OLAA.SI  for A$144.9
million ($96.69 million) raised competition concerns in the
supply of cotton ginning services. 
    The affiliate of Singapore's Olam Group  OLAG.SI  and Dutch
commodity merchant Louis Dreyfus Company have been engaged in an
international bidding war to take control of Namoi, which would
help them expand their footprint in Australia.   
    Olam, through its unit, Queensland Cotton, and Namoi both
supply cotton ginning, cotton lint classing, logistics and
warehousing services in Australia, with both the firms involved
in acquisition and marketing of cotton lint and cottonseed.
     "The proposed acquisition would reduce the number of
competing ginning suppliers in the Lower Namoi Valley from three
to two, with Olam operating four of the five cotton gins if the
acquisition proceeds," Australian Competition and Consumer
Commission (ACCC) Commissioner Stephen Ridgeway said in a
statement.
    If the acquisition goes through, only one alternative cotton
gin in the Lower Namoi Valley region operated by Australian Food
and Fibre would exist, Ridgeway added. 
    The possibility of reduced competition could result in
higher prices for cotton growers in the region, the regulator
said, while also flagging concerns around the impact on the
supply of cotton lint classing services in Australia.
($1 = 1.4986 Australian dollars)

 (Reporting by Roushni Nair in Bengaluru; Editing by Kim Coghill
and Jamie Freed)
 ((Roushni.Nair@thomsonreuters.com;))