Australia’s consumer watchdog has signalled its approval of Kiwi operator, Tourism Holdings Limited (THL)’s proposed acquisition of Aussie campervan rental group Apollo Tourism and Leisure (ATL).
The Australian Competition and Consumer Commission (ACCC) announced this morning it would not oppose the merger, provided Apollo divest a large proportion of its newest motorhome fleet.
THL and Apollo are the two largest suppliers of rental RVs in Australia and are each other’s closest competitors in a market where smaller rivals and potential entrants may face challenges achieving comparable scale, according to ACCC deputy chair Mick Keogh.
The removal of THL’s largest and closest competitor raised concerns that consumers would pay more to rent RVs or receive lower-quality products and services.
To address the ACCC’s concerns, THL and Apollo subsequently offered a court-enforceable undertaking to divest 200 (around 80 per cent) of the four to six berth motorhomes in Apollo’s Australian rental fleet and associated forward bookings to an ACCC-approved purchaser.
The undertaking also includes the divestment of leases for Apollo rental branches and depots in Alice Springs, Darwin, Hobart and Perth, and the Apollo Star RV motorhome brand.
THL and Apollo proposed Jucy, which currently operates campervan rental businesses in Australia and New Zealand, as the up-front purchaser of the divested assets. The ACCC has approved Jucy as the purchaser.
According to the ACCC, Juicy’s recent acquisition by Next Capital and the divested Apollo assets, ensure Jucy is a strong competitor in the supply of rental RVs.
“The ACCC is satisfied that the undertaking addresses the competition concerns and considers that Jucy will be able to compete effectively with THL,” Keogh said.
The merger between THL and Apollo remains subject to further conditions including refinancing by THL, approval from the Australian Foreign Investment Review Board and requisite approval from ATL shareholders and the Supreme Court of Queensland.
Pending the remaining hurdles, Apollo expects the merger will be complete before the end of this year.
