Dye & Durham Limited (DND.TO), in an update regarding the regulatory review of the company's proposed acquisition of Link Administration Holdings Limited (LNK.AX), said that the Australian Competition and Consumer Commission or ACCC has referred the transaction to a more extensive and comprehensive Phase II review. The ACCC expects to make a final decision on September 8, 2022.
While combining D&D and Link does not raise issues, by acquiring Link, D&D would gain the 42.77% shareholding in PEXA Group Ltd (PXA.AX) that Link currently owns. It is the potential vertical integration of D&D's operations and PEXA that gives rise to the competition concerns, the ACCC said in a statement.
According to the ACCC, the proposed acquisition would align PEXA, a near monopoly provider of Electronic Lodgment Network services, with D&D, a significant supplier of software to lawyers and conveyancers, significantly increasing vertical integration in this industry.
While the transaction will not provide D&D with majority control of PEXA, the ACCC considers preferential conduct may benefit both D&D and PEXA.
Dye & Durham said it is concerned about the statement that the ACCC has issued and is evaluating what impact it may have on the proposed transaction with Link.
In December 2021, Dye & Durham agreed to acquire Link Administration Holdings Limited or "Link Group" for cash consideration of about C$3.2 billion.
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