Alinta upset at ACCC reply to AGL deal - Breaking News - Business - Breaking News

West Australian energy infrastructure company Alinta Ltd says it is disappointed the competition watchdog has raised concerns about its plans to merge with the infrastructure assets of the Australian Gas Light Company (AGL).
The two companies had both launched hostile takeover bids for each other earlier this year before announcing they had agreed on a $6.8 billion merger deal.
The deal would see Alinta acquire AGL's Agility infrastructure business while AGL in turn would take an initial 33 per cent stake in Alinta's West Australian retail and co-generation business.
The Australian Competition and Consumer Commission (ACCC) has carried out an initial assessment of the merger deal and also of the two hostile takeovers, which remain on the table for legal reasons.
The regulator has approved AGL's bid for Alinta, but has raised concerns about both the Alinta bid for AGL and the merger proposal.
The key concern raised over the merger deal is that it will deliver Alinta substantial interests in both the Eastern Gas Pipeline and the Moomba to Sydney pipeline and this could affect competition in the market for supply of wholesale gas in south east NSW, including Sydney.
Alinta chief executive Bob Browning said the company was disappointed with the ACCC's decision not to provide an informal clearance for the deal.
Mr Browning said Alinta had spent the last three months in co-operative discussions with the ACCC over the deal.
"As part of those discussions, we amended our original behavioural undertakings to take into account the concerns of the ACCC," he said.
"While we believe that the undertakings Alinta has made to date are broad and sufficient, we will continue to work with the regulator to determine how we can further strengthen these undertakings."
Interested parties now have until July 3 to respond to the issues raised by the ACCC and a final decision is expected by July 28.
Mr Browning said both Alinta and AGL remained committed to the merger deal.
"While we are disappointed at the decision of the ACCC, we are not unprepared," he said.
"Both Alinta and AGL will continue to work towards implementing the merger of our infrastructure assets while the discussions with the ACCC continue."
Mr Browning said Alinta looked forward to a timely decision from the regulator which would give shareholders greater clarity on the future of the transaction.
At 1212 AEST Alinta shares were up 13 cents to $10.53 and AGL had risen 11 cents to $17.66.
© 2006 AAP