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UPDATE 1-Australia's Aurizon to exit intermodal business after court backs terminal sale

Published 15/05/2019, 04:16 pm
UPDATE 1-Australia's Aurizon to exit intermodal business after court backs terminal sale
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(Adds details about sale, ACCC comment)

May 15 (Reuters) - Rail operator Aurizon Holdings Ltd AZJ.AX on Wednesday said the Federal Court of Australia has given the go-ahead for the sale of a freight terminal to rival Pacific National, paving the way for its exit from its loss-making intermodal business.

The court decision allows Aurizon to progress the A$205 million ($142 million) sale of the Acacia Ridge Intermodal Terminal to Pacific National, pending regulatory approval by the Foreign Investment Review Board.

The Australian Competition and Consumer Commission (ACCC) had sought a court injunction in July against Pacific National's proposed acquisition of Aurizon's Acacia Ridge Terminal and Queensland intermodal business, used to transfer freight between road and rail transport. regulator argued that the deal, along with the appointment of Pacific National to operate the Acacia Ridge Terminal, would likely result in a substantial lessening of competition.

Commenting on the court ruling, ACCC said the transactions would "create huge, likely insurmountable, barriers to new entrants who may wish to enter the markets and compete with Pacific National".

Aurizon said in a statement on Wednesday that the terminal sale would complete its three-stage exit from the intermodal business through a combination of closure and sale.

Shares of Aurizon closed 1% higher after rising as much as 1.6% to their highest since December 2017, in a broader market .AXJO which finished 0.7% up.

($1 = 1.4438 Australian dollars)

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