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
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 £[
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
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.