Federation-Novion $22bn merger gets Australian regulator nod
The Australian Competition and Consumer Commission (ACCC) has given its nod to the proposed $22bn merger between Federation Centres and Novion Property, after both the companies agreed to divest one of their shopping centers in South East Melbourne.
ACCC asked the companies to divest either of their shopping centers in South East Melbourne as the watchdog believed that the merger was likely to lessen competition as Bayside Shopping Centre and Karingal Hub are the only large multi-purpose shopping centers in the region.
Commenting on the merger, ACCC Commissioner Jill Walker said: "The ACCC concluded that Karingal Hub and Bayside are each other's closest competitors in the Frankston region and that common ownership of these shopping centers would be likely to substantially lessen competition for shoppers in the region.
"The ACCC was also concerned about a potential reduction in competition for retail tenants. This reduction in competition could have resulted in less attractive amenities and retail offerings, or an ability to charge higher rents."
However, ACCC believes that the merger will not raise competition concerns in most regions where both the companies currently compete as there are sufficient alternative shopping centre managers in these regions.
Federation Centres and Novion own or co-own 65 and 27 shopping centers, respectively, across Australia.
Following the sale of one shopping center, the combined company will own or co-own 91 shopping centers, making it the second largest owner of shopping centers in Australia.
Image: View inside Bayside Shopping Centre looking towards Kmart. Photo: courtesy of Lakeyboy / Wikipedia.