Australia’s competition watchdog has announced 10 July 2025 as the potential date for the release of its findings into the proposed acquisition of ASX listed Silk Logistics by container terminal operator DP World.
Silk has since stated that it is reviewing its position and it is discussing the next steps with DPW.
DP World’s bid for Silk was delayed when the Australian Competition and Consumer Commission (ACCC) intervened in the transaction in December last year by beginning an investigation the potential tie-up. The ACCC was concerned to discover whether or not a combined DPW / Silk entity would have the ability and incentive to favour its own port logistics services and / or limit the ability of rivals to provide a competitive service. The watchdog also wanted to know if the deal would result in a loss of competition at any level of the supply chain.
A few months later, in mid-March 2025, the ACCC released a statement of issues. Noting that section 50 of the Competition & Consumer Act 2010 forbids acquisitions that could or would substantially lessen competition, the ACCC claimed the following issues of concern:
- the proposed acquisition is likely to substantially lessen competition in the supply of container transport services
- the combined entity could have the ability and incentive to offer bundled packages that could in-part amount to a below-cost offer that could hinder rivals from competing
- the combined entity would have access to commercially sensitive information about rivals and customers that the pre-merger companies would not
Agreeing to acquire
DP World entered into a deed on 11 November to acquire 100% of the entire share capital in return for a payment to Silk shareholders of AUD$2.14 per Silk share, represented a premium of 45.6% premium to the previous close of the Australian stock exchange. The proposal valued Silk’s equity at about AUD$174.5 million. Silk’s board unanimously recommended a vote in favour by shareholders of the proposed transaction.
Commenting on the proposed deal, Silk Chief Executive Officer and Managing Director, John Sood, said back in November 2024 that: “the proposed transaction recognises the significant investment that Silk has made into its national integrated port to door service offering, extensive capabilities and the strong relationships we have built with our dedicated customer base. With the benefit of DP World Australia’s infrastructure combined with Silk’s landside expertise, Silk will continue to focus on providing the highest quality services to its customers. We see strong strategic and cultural alignment between Silk and DP World Australia and we look forward to working together to achieve our shared goals.”
