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Investing.com-- Shares of Australia’s Silk Logistics Holdings Ltd (ASX:SLH) fell sharply on Thursday after the country’s competition watchdog raised some concerns over the logistics provider’s acquisition by logistics giant DP World.
Silk Logistics tumbled 17.7% at the open to A$1.63 per share, lagging a 0.3% rise in the ASX 200 index. The stock was at its lowest since November, and was also trading well below DP World’s offer of A$2.14 per share.
The Australian Competition and Consumer Commission- the country’s antitrust regulator- said that the deal could be bad for competition, given that Silk is one of the only door-to-door container logistics providers in the country.
DP World- a major logistics and port operating firm- is likely to gain a greater foothold in the industry, potentially reducing competition.
“Our review is focused on DP World Australia’s ability and incentive to either increase terminal fees or worsen the quality of terminal services for container transport providers that compete with Silk, after the acquisition,” ACCC Commissioner Philip Williams said in a release.
The ACCC also flagged concerns over DP World being able to access and use commercially sensitive data about Silk’s rivals.
The competition watchdog said it was inviting submissions from interest parties on the matter.
DP World- a major Dubai-based logistics and shipping company- had offered to buy Silk for A$174.5 million in November.