The ACCC/Metcash decision - What it means in mergers
Australian Competition and Consumer Commission v Metcash Trading Limited and Pick n Pay Retailers (Pty) Limited  FCA 967
On 25 August 2011, Justice Emmett of the Federal Court handed down his decision in the ACCC proceedings against Metcash in relation to its proposed acquisition of Franklins, finding in favour of Metcash.
On 1 July 2010, Metcash entered into an agreement to acquire all of the issued shares in Franklins for $215 million. On 17 November 2010, the ACCC announced its decision to oppose the transaction on the basis that it would lead to a substantial lessening of competition in the market for the wholesale supply of packaged groceries to independent supermarkets. Unpersuaded by the ACCC’s analysis in relation to market definition and the impact of the acquisition on competition, Metcash invited the ACCC to commence proceedings and make their case.
The case was decided on the key issues of market definition, the counterfactual (ie the future market structure without the acquisition) and the likely impact of the proposed acquisition on competition. These are some initial thoughts.