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Why the ACCC is concerned about Transurban Group’s interest in WestConnex

Transurban shares

The ACCC has raised its concerns about the proposed acquisition of the Sydney WestConnex project by a consortium led by Transurban Group (ASX: TCL).

The ACCC’s primary concern is that Transurban is already a dominant toll road operator and if it acquired WestConnex, this could lessen competition and possibly lead to higher tolls for consumers.

Supporting its concerns, the ACCC noted that Transurban controls 15 of the 19 road toll concessions in Australia and 7 of the 9 concessions in New South Wales.

Transurban shares were down 2.25% following the announcement.

Foolish Takeaway

Whether the ACCC approves the acquisition or not, Transurban already has a virtual monopoly much like other infrastructure operators such as Auckland International Airport Limited (ASX: AIA). It’s no wonder that long term investors looking to preserve their capital such as Australian Super, the Canada Pension Plan Investment Board and the Abu Dhabi Investment Authority have all chosen to partner with them.

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Motley Fool contributor Kevin Gandiya has no position in any of the stocks mentioned.

You can follow Kevin on Twitter @KevinGandiya.

The Motley Fool Australia owns shares of and has recommended Transurban Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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