The Australian Consumer and Competition Commission will not oppose the proposed acquisition of One Rail by Aurizon, after accepting a court-enforceable undertaking from Aurizon to divest One Rail’s east coast business.

Without the divestment of One Rail’s east coast business, the ACCC considered that the proposed acquisition would reduce the number of main competitors in the supply of coal haulage in New South Wales and Queensland from three to two, likely resulting in higher prices or decreased service levels.

Aurizon and One Rail both supply rail haulage services for coal in NSW and Queensland and are the two of the three main suppliers of coal haulage in these states, along with Pacific National.

Aurizon is the largest supplier of coal haulage in Queensland, and the second largest in NSW. One Rail is a well-established third supplier in NSW and has recently emerged as a third competitor in Queensland that is having a significant impact.

Aurizon offered a proposed undertaking to the ACCC early in the process to divest One Rail’s east coast business, which includes its coal haulage operations in NSW and Queensland. The undertaking allows Aurizon to sell the business either by a trade sale or demerging it as a new separate ASX-listed entity.

ACCC chair Gina Cass-Gottlieb said the divesture ensures there will remain three main suppliers of coal haulage in NSW and Queensland.

“The ACCC also considered the impact of the proposed acquisition on competition in one or more regional markets for the supply of rail haulage services for bulk commodities, other than coal,” she said.

“We are also satisfied that the divestment of One Rail’s east coast business would preserve it as a potential competitor to Aurizon for the supply of non-coal bulk rail haulage in the future, and Aurizon would continue to be constrained by a number of existing bulk rail haulage competitors.”