Canada Pension Plan Investment Board / Macquarie Communications Infrastructure Group
OFT closed case: Anticipated acquisition by Canada Pension Plan Investment Board of Macquarie Communications Infrastructure Group.
Affected market: Broadcasting and communication services
Anticipated acquisition by Canada Pension Plan Investment Board of Macquarie Communications Infrastructure Group
The OFT’s decision on reference under section 33(1) given on 21 May 2009. Fully text of decision published on 27 May 2009.
Please note that square brackets indicate figures or text which have been deleted or replaced at the request of the parties for reasons of commercial confidentiality
1. Canada Pension Plan Investment Board (‘CPPIB’) is a federal non-agent Canadian crown corporation created by a Canadian Act of Parliament in December 1997 to invest on behalf of the Canada Pension Plan (‘CPP’). CPPIB is a professional investment management organisation operating in the private sector world of financial markets and operates independently of CPP. CPPIB has a number of direct shareholdings in UK companies.
2. Macquarie Communications Infrastructure Group (‘MCG’) is a triple stapled specialist communications infrastructure fund consisting of three entities (Macquarie Communications Infrastructure Limited, Macquarie Communications Infrastructure Trust and Macquarie MCG International Limited) listed on the Australian Securities Exchange.
3. MCG has an indirect controlling interest in three portfolio companies: Arqiva, Airwave and Broadcast Australia. Arqiva is a company active in the infrastructure behind television, radio and wireless communications predominantly in the UK and is comprised of three main business units (terrestrial broadcast, satellite and media and wireless access). Airwave is active in the development and provision of mobile information and communication technology to public safety organisations in the UK. Broadcast Australia is a company active in the operation and development of analogue and digital broadcasting services throughout Australia and other countries in the Asia-Pacific region.
4. MCG's UK turnover for the financial year ending 30 June 2008 was £[ ] million.
5. On 31 March 2009, CPPIB announced that it proposed to acquire 100 per cent of the issued stapled securities in MCG, including its indirect controlling interest in Arqiva, Airwave and Broadcast Australia. The transaction will take MCG into private ownership and it will cease to be a listed company.
6. A merger notice having been filed with the OFT on 23 April 2009, the 20 day statutory deadline is 22 May 2009.
7. As a result of this transaction CPPIB and MCG will cease to be distinct. The UK turnover of MCG exceeds £70 million, so that the turnover test in section 23(1)(b) of the Enterprise Act 2002 (the Act) is satisfied. The OFT therefore believes that it is or may be the case that arrangements are in progress or in contemplation which, if carried into effect, will result in the creation of a relevant merger situation.
8. There is no horizontal overlap between the activities of the parties.
9. There is, however, a very limited vertical relationship between the parties. CPPIB has a [ ] per cent stake in Wales and West Utilities, a gas utility company that rents space on a number of Arqiva-owned structures in the UK. In addition, Wales and West Utilities is currently a utilities provider to Arqiva. However, the OFT does not consider that these limited vertical relationships would raise any plausible vertical theories of harm relating to foreclosure in either gas distribution or in any of the services that Arqiva provides.
10. Finally, having reviewed the information provided by the parties, the OFT considers that there is no risk of conglomerate effects in this case.
11. In light of the above, the merger does not appear to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.
12. Consequently, the OFT does not believe that it is or may be the case that the merger may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.
13. This merger will therefore not be referred to the Competition Commission under section 33(1) of the Act.