ACCC Gives Lendlease, Stockland Two-Month Ultimatum on AU$1.3 billion Deal

Highlights:

• ACCC Deadline: The Australian Competition and Consumer Commission has given Lendlease and Stockland until mid-September to address competition concerns in their $1.3 billion community sale deal.
• Regional Impact: The ACCC fears the deal could reduce competition in Illawarra (NSW), north-west Perth, Ipswich, and Moreton Bay (Queensland), potentially leading to higher prices and slower property releases.
• Company Responses: Lendlease and Stockland are working to resolve the ACCC’s issues while the deal remains subject to further regulatory approvals, including from the Foreign Investment Review Board.

Deal Under Scrutiny

The Australian Competition and Consumer Commission (ACCC) has given Lendlease (ASX: LLC) and Stockland (ASX: SGP) a two-month deadline to address concerns over their AU$1.3 billion master-planned community sale. The antitrust regulator has postponed its final decision to mid-September, citing potential competition issues in four regional residential markets.

Competition Concerns

The ACCC fears the deal could reduce competition in the Illawarra (NSW), north-west Perth, Ipswich, and Moreton Bay (Queensland). ACCC Commissioner Liza Carver stated that Lendlease and Stockland must either alleviate these concerns or remove the contested regions from the transaction.

Impact and Responses

The delay affects Lendlease’s AU$4.5 billion divestment program and Stockland's joint venture with Supalai Australia Holdings. Both companies are working to resolve the ACCC’s issues while the deal remains subject to further regulatory approvals. The ACCC emphasizes that the proposed acquisition might enable Stockland to manipulate market conditions, raising prices or delaying supply, thus impacting competition negatively.

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