THE AUSTRALIAN Competition and Consumer Commission will not oppose Elders Limited’s proposed acquisition of Delta Agribusiness after accepting a court-enforceable undertaking that commits Elders to divest six Delta stores in Western Australia.

The consumer watchdog initially raised concerns about the transaction in its statement of issues released in May.

It warned the deal could significantly reduce competition in rural merchandise and agronomy services across multiple states, particularly in local markets including north-west Victoria, South Australia’s Murray-Mallee, and WA’s Northern and Central Wheatbelt, and Great Southern.

The undertaking announced today resolved ACCC’s concerns relating to WA local markets.

The ACCC has approved the sale of the relevant Delta Ag stores with Independent Rural named as the purchaser for Delta stores in Dalwallinu and Kalannie, and EE Muir & Sons as the purchaser for Delta stores in Albany, Hyden, Manypeaks and Wellstead.

Elders and Delta both supply rural merchandise such as agricultural chemicals, seed, fertiliser, and animal-health products, and related services like agronomy through their retail networks.

Both companies also wholesale rural merchandise.

ACCC deputy chair Mick Keogh said the watchdog reviewed the likely affect the proposed acquisition would have on competition in each area both companies have a retail store.

“We examined the strength of competing retailers, the particular geographic features and size and type of farms, among other factors,” Mr Keogh said.

“We also engaged with a range of stakeholders including farmers, competing retailers, wholesale suppliers, buying groups and industry bodies as part of our review.

“The nature of competition in the retail supply of rural merchandise is more localised than is the case in other retail sectors, partly due to the differences in farming in different local areas, and the importance of local relationships.”

He said following this review, the ACCC remained concerned about the potential for substantially reduced competition in local areas in WA.

He said the undertaking addressed those concerns, leading the ACCC to decide not to oppose the deal.

“Independent Rural’s and Muirs’ acquisition of Delta stores in each of these local areas will create a strong, independent and viable long-term competitor to Elders in those six areas.”

In its Statement of Issues, the ACCC also identified potential competition concerns in the retail supply of rural merchandise at a broader regional, state or national level, and in the wholesale supply of rural merchandise in WA.

Mr Keogh said having reviewed additional information and engaged in further market inquiries, the ACCC considers the proposed acquisition is unlikely to substantially lessen competition in rural merchandise retail at a broader regional, state or national level, or wholesaling in WA.

“Ultimately, the ACCC did not consider that the proposed acquisition was likely to substantially lessen competition in any relevant market with the undertaking provided by Elders.”

Elders response

In an ASX statement, Elders said the decision cleared the way for its acquisition of Delta Ag to be completed on November 3.

Elders managing director and chief executive officer Mark Allison said the company welcomed the ACCC announcement.

“We are pleased with the outcome of the ACCC’s deliberation and are looking forward to supporting Delta in the next phase of its growth post-completion,” Mr Allison said.

“Elders has always maintained that the transaction will not lessen competition in rural merchandise markets in Australia and will ultimately benefit farmers.

“It is our intent to leverage the respective strengths and local knowledge of both companies to offer the best service and solutions for our farming clients.”

Elders announced it has entered into an agreement to acquire Delta Agribusiness for $475 million in November 2024.

Delta provides rural products and advisory services to customers in New South Wales, Queensland, Victoria, SA, and WA.

The acquisition will add Delta’s network of 68 locations and approximately 40 independent wholesale customers to Elders’ existing portfolio.

Source: ACCC, Elders