Details of Louis Dreyfus' proposed acquisition of Namoi Cotton

Namoi Cotton Limited (ASX: $NAM) has received approval from the ACCC for the proposed acquisition by Louis Dreyfus Company B.V. and its subsidiaries. The approval is subject to a court-enforceable undertaking, requiring the divestment of shares in ProClass Pty Ltd and termination of the joint venture with WANT Cotton Pty Ltd.

ACCC Deputy Chair Mick Keogh's perspective on the acquisition

The ACCC Deputy Chair, Mick Keogh, expressed concerns about the potential impact of the acquisition on competition in the supply of cotton ginning and cotton lint classing services in Australia. The court-enforceable undertaking addresses these concerns by ensuring that the LDC Group does not have interests in both ProClass and ACS, which together class more than 80 per cent of all cotton lint in Australia. Keogh emphasized that without the divestiture, there was a risk of reduced competition and potential negative effects on pricing and service quality.

Summary of ACCC's decision and outlook

The ACCC's approval of the acquisition, subject to the court-enforceable undertaking, allows the acquisition to proceed with conditions to mitigate potential anti-competitive effects. The decision aims to maintain competition in the supply of cotton ginning and lint classing services. Looking ahead, the ACCC is also reviewing another proposed acquisition of Namoi, indicating ongoing scrutiny of competition in the industry.