SYDNEY—The competition watchdog has approved the acquisition of Tasmania's Tamar Valley power station development by state government-owned Aurora Energy, pending further assessments of the deal.
The Government will acquire the Tamar Valley Generation assets from Babcock & Brown Power (BBP) today, and intends to transfer those assets to Aurora.
A court-enforceable undertaking from Aurora and the Tasmanian Government in relation to the acquisition has been accepted by the Australian Competition and Consumer Commission (ACCC).
The undertaking requires both parties to hold the assets separate temporarily in order for the ACCC to conduct a full competition assessment of the deal.
"The commercial timing pressures on the parties meant that the ACCC was left with very little time to assess the acquisition," ACCC chairman Graeme Samuel said in a statement.
"However, the Tamar Valley Power Station is not yet operational.
"In this case a `hold separate' undertaking that operates for an interim period protects competition while the ACCC conducts a comprehensive public assessment of the acquisition.
"This is a very different situation to a normal merger or acquisition because the Tamar Valley Power Station Project is under construction and is still some time away from being competitive."
Aurora Energy has a strong short-term incentive to complete the Tamar Valley project in order to maintain the security of Tasmania's electricity supply, Mr Samuel said.
"Once the ACCC has completed an assessment of the acquisition, involving comprehensive market inquiries, the ACCC will decide whether or not to oppose the acquisition," he said.
"If the ACCC opposes the acquisition, it may seek divestiture orders from the Federal Court."
BBP announced the Tamar sale last month, as part of a program to reduce debt.
