ACCC won't block Elders' $187m AIRR tilt

The ACCC won't block Elders' proposed $187 million takeover of Australian Independent Rural Retailers, but the watchdog is closely monitoring increasing consolidation in the rural sector.

The Australian Competition and Consumer Commission on Thursday said it had examined Elders' proposed cash-and-scrip transaction for wholesale buyer AIRR, and decided other independent rural stores would not necessarily suffer if the two merged.

"Market feedback suggested that most independent retailers consider they have sufficient alternative supply options if Elders attempted to discriminate against them," ACCC deputy chair Mick Keogh said.

"It also appears that existing or potential new buying groups or wholesalers could expand in response to any future change in AIRR's offering."

Elders currently has minimal operations in wholesaling to independent rural retail stores, while AIRR is an important wholesaler to nearly 2,000 independent rural stores, but has minimal assets of its own in rural retailing.

AIRR has five retail operations in Victoria and last year acquired The Hunter River Company, which makes products for cattle, sheep and equine health.

Elders has said AIRR was expected to generate earnings before tax of $21.9 million for the 12 months to September 2019.

Shares in Elders rose after the ACCC's announcement, and were 0.37 per cent higher at $6.805 by 1402 AEST.

That's still down 2.1 per cent from $6.95 a year ago, during which time the company has battled hot and dry weather.

Meanwhile, Mr Keogh said the ACCC would continue to monitor the rural sector, which he noted had increasingly consolidated in recent years.

The Federal Court on Thursday approved the $469 million buyout of Ruralco by Canadian fertiliser giant Nutrien, following shareholder approval this month.

The ACCC had allowed the merger to proceed after Nutrien - which owns the Landmark brand in Australia - agreed to divest three rural merchandise stores to ease competition concerns.

Austrlaian Associated PressBack to Breaking News

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