Federation Centres’ planning acquisition of the Novion Property Group will not be blocked by the Australian Competition and Consumer Commission (ACCC), after the parties agreed to divest one of the South East Melbourne shopping centres.
ACCC Commissioner, Jill Walker, gave the green light for the acquisition, that will see the combined Federation/Novion group own or co-own 91 shopping centres across Australia, after they entered a court-enforceable undertaking to divest their stake in either the Karingal Hub shopping centre or the Bayside centre.
Walker said the ACCC flagged concerns over the Karingal Hub and Bayside shopping centres, as they were the only large multi-purpose shopping centres within 20km of the Frankston CBD.
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 centres would be likely to substantially lessen competition for shoppers in the region,” Walker said.
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.
“The sale of one of these shopping centres to an effective independent competitor will alleviate the ACCC’s concerns regarding competition for shoppers and retail tenants in South East Melbourne.”
In a statement to the Australian Securities Exchange (ASX), Novion reported that the acquisition was awaiting approval from the Foreign Investment Review Board, which is expected to be given before Wednesday’s meeting of Novion securityholders who are expected to back the deal.
