ACCC gives IPH acquisition of Xenith the green light

Written on the 28 March 2019 by David Simmons

ACCC gives IPH acquisition of Xenith the green light

The likelihood of an intellectual property giant materialising in Australia is edging closer after the Australian Competition and Consumer Commission (ACCC) delivered its blessing.

Though shareholders have the option of choosing who IP firm Xenith will partner up with, the ACCC has said that it will not oppose IPH Limited's proposed acquisition of Xenith.

Xenith itself appears to want to merge with QANTM the third major IP parent in Australia.

Despite the acquisition of Xenith by IPH resulting in the combination of the two largest suppliers of IP services in Australia, with a market share of about 40 per cent of total patnet filings, the ACCC says the deal is kosher.

"Most customers we consulted did not express concerns," says ACCC commissioner Roger Featherston.

"Corporate customers who seek patent services rely on the expertise and infrastructure of large IP firms to handle their work in complex technology areas and to manage their volume of patent filings."

"We consider that other firms, including subsidiaries of QANTM and several independent firms, would likely provide sufficient competitive constraint on the new entity."

Last week the ACCC announced that it would not oppose the proposed merger of QANTM and Xenith - a deal Xenith appears to be leaning towards.

The ACCC said that the merger of the second and third largest IP services providers in Australia would mean they would grab around 30 per cent of the market share.

The watchdog is also currently investigating the recent acquisition by IPH of 20 per cent of Xenith.

IPH this morning welcomed the ACCC's decision to not oppose the proposed acquisition of Xenith, again asking Xenith shareholders to vote against the QANTM merger.

"The announcement by the ACCC that it will not oppose the IPH Offer has removed the key regulatory condition to implementing the combination of IPH and Xenith," says IPH.

"In IPH's view removal of this condition confirms that the IPH offer is a superior proposal to the QANTM merger."

IPH says that shareholders should side with IPH over QANTM because its offer allows Xenith shareholders to become a part of an ASX200 company and IPH has integrated seven acquisitions into its business since listing.

On the flip-side, IPH says QANTAM has had limited liquidity and challenges in trading since it listed in 2016.

IPH holds 19.9 per cent of total shares in Xenith, giving them a considerable voting power when the QANTM merger is voted on.

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Author: David Simmons

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