Australia’s consumer watchdog is seeking further views on the merger of Armaguard Group and Prosegur Australia.
The two companies reached an agreement to merge under Armaguard branding, stating that the declining use of cash has led to significant excess capacity within the cash in transit (CIT) services infrastructure and is no longer viable to sustain two major players in the industry.
CIT services include cash transport, management and processing services and are predominantly provided to banks and retailers.
Liza Carver, Commissioner of the ACCC, said some stakeholders have expressed concerns that given the lack of viable alternatives to Armaguard and Prosegur, the merger will reduce competition and lead to increased prices and reduced service levels.
“While the ACCC considers there is a clear reduction in competition if Armaguard and Prosegur merge, the critical question is whether a reduction in competition would also soon occur without the transaction.”
The implication that the decline in cash use on Armaguard and Prosegur’s CIT business and their argument that ongoing competition between them is not sustainable is also being considering by the ACCC.
“Despite cash use decreasing since COVID-19, cash remains an important payment method for some members of the community, including older Australians, vulnerable Australians and Australians living in regional and remote areas.
“The ACCC can only grant authorisation if it is satisfied in all circumstances that there is either not a likely substantial lessening of competition, or that there is likely to be public benefits that outweigh any public detriments,” said Carver.
The ACCC’s final decision will likely be announced in late March 2023.
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