The proposed acquisition of private integrated travel company Stella Travel Services, which has considerable operations in New Zealand, may raise competition concerns, the Australian Competition and Consumer Commission (ACCC) says.Under the deal announced
The proposed acquisition of private integrated travel company Stella Travel Services, which has considerable operations in New Zealand, may raise competition concerns, the Australian Competition and Consumer Commission (ACCC) says.
Under the deal announced in May, Jetset Travelworld would acquire Australia-based Stella, with Stella shareholders to hold 50 percent of the expanded capital of the merged entity. Jetset is listed on the ASX with Qantas having a 58 percent stake.
Stella's brands in this country include United Travel, Harvey World Travel, Go Holidays, and Atlantic Pacific American Express.
In a statement of issues released yesterday, ACCC said its market inquiries to date indicated Jetset and Stella were each other's closest competitors due to the similarities in their business models.
The removal of each other as an alternative for retailers seeking affiliation to a network may increase the level of influence the merged firm has over the range and price of travel content offered by network members, ACCC said.
The retail networks of Jetset and Stella -- including corporate-owned, franchise and affiliated retail stores -- were two of the three largest retail store networks supplying leisure travel products and services in Australia.
While the two companies did not own and control each store within their respective networks, they had considerable influence over the range of product and pricing decisions of franchise and affiliated retail stores, ACCC said.
Accordingly, the proposed acquisition would result in the merged firm having a significant combined market share in the retail supply of leisure travel products and services.
When the companies announced the proposed deal, they said the merged entity would be well positioned to explore further growth opportunities in Australia, this country and the international travel market. The merger was expected to generate efficiency benefits.
