Silk Logistics Holdings (SLH) is facing potential delays in its proposed acquisition by DP World Australia due to regulatory hurdles raised by the Australian Competition and Consumer Commission (ACCC) and the Foreign Investment Review Board (FIRB). The ACCC has released a Statement of Issues (SOI) regarding the Scheme, outlining preliminary concerns about the competitive impacts of the acquisition. Stakeholders have until March 27, 2025, to comment on the SOI, with the ACCC’s final decision expected on June 5, 2025. FIRB approval is also a condition precedent to the Scheme, and it is anticipated that FIRB will consult with the ACCC before making its decision.
As a result of these delays, Silk Logistics is considering postponing the Scheme Meeting and Second Court Date, originally scheduled for March 28, 2025, and April 1, 2025, respectively. The company will update shareholders on any changes to the Scheme timetable. Despite the regulatory challenges, both Silk Logistics and DP World Australia remain committed to the transaction and are working to progress the necessary approvals. The Silk Logistics board continues to recommend that shareholders vote in favor of the Scheme, in the absence of a superior proposal and subject to the Independent Expert continuing to conclude that the Scheme is in the best interests of Silk Shareholders.
The ACCC’s SOI represents a preliminary view and does not constitute a final decision. The concerns raised by the ACCC could potentially lead to modifications of the deal, or even its rejection. The timeline for the Scheme is now heavily dependent on the regulatory review process, introducing uncertainty for investors. This development highlights the increasing scrutiny of mergers and acquisitions by regulatory bodies in Australia, particularly where significant market concentration could result. Investors are advised to monitor further updates from Silk Logistics regarding the ACCC and FIRB decisions.
