April 4, 2014 / 2:16 AM / 4 years ago

UPDATE 1-Australian regulator clears Transurban's Queensland Motorways bid

* Transurban bid would not substantially reduce competition

* Transurban consortium one of three bidding for assets

* Queensland Motorways largest of state assets set for sale (Adds detail on other bidders, state asset sales)

By Byron Kaye

SYDNEY, April 4 (Reuters) - Australia’s competition regulator said it would let Transurban Group, the country’s biggest toll road owner, buy Queensland state-owned toll road owner Queensland Motorways Ltd, ruling that a deal would not substantially reduce competition.

Transurban, superannuation fund conglomerate AustralianSuper and the state-run Abu Dhabi Investment Co form one of the three international groups bidding for QML, the largest of several Australian privatisations with an expected price tag around A$5 billion ($4.6 billion).

The Australian Competition and Consumer Commission (ACCC) is playing an increasingly central role in plans by federal and state governments to privatise some A$100 billion of publicly owned assets in the next two years to fund capital works.

Last month, the ACCC blocked gas and electricity company AGL Ltd from buying two coal fired power stations from the New South Wales state government for A$1.5 billion, prompting that government to shelve the sale and seek to have the decision overturned by a higher authority.

“The (Australian Competition and Consumer Commission) determined that the proposed acquisition would not enable Transurban to raise prospective rivals’ costs through higher roaming fees, for future opportunities to own and operate toll road concessions,” the ACCC said in a statement on Friday.

The purchase would give Transurban its first foray into Queensland, Australia’s third most populous state. The company already has roads in New South Wales and Victoria, the biggest and second biggest states, as well in the U.S. state of Virginia.

The company is seeking to strike a balance between acquiring new assets before long-term road licences expire and growing stockholder distribution in the short term through toll increases and technology improvements.

Bidding for QML remains competitive. Australia’s IFM, which is owned by about 30 superannuation funds, and Austria’s Borealis are bidding with Singapore sovereign wealth fund GIC following the departure of the Ontario Teachers’ Pension Plan from that consortium, according to local media.

A third group is made up of Australian fund manager Hastings, Spain’s Abertis, Dutch pension fund manager APG and another sovereign fund, the Kuwait Investment Authority.

Final bids are due on April 22. ($1 = 1.0832 Australian dollars) (Additional reporting by Lincoln Feast; Editing by Stephen Coates)

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