The cash-in-transit industry is declining due to the decreased use of cash as a payment method
Gilbert + Tobin (G+T) has provided legal advice to Prosegur Cash SA regarding the successful authorisation by the Australian Competition and Consumer Commission (ACCC) of the merger between Prosegur's Australian business and Linfox Armaguard Pty Ltd.
ACCC has authorised the merger between Prosegur and Armaguard, subject to certain conditions, as the deal is expected to bring public benefits. Prosegur and Armaguard are the two largest providers of cash-in-transit services in Australia. Prosegur specialises in designing and implementing services that cover all phases of the cash management process, including transporting valuables, end-to-end ATM management, international transport, cash management and automation. Armaguard provides secure transport and protection for cash and precious goods for major banks and organisations.
The merged entity is expected to combine the strengths and expertise of Prosegur and Armaguard in cash management and transportation. This strategic move will enable the new business to reduce fixed costs, eliminate excess capacity, and achieve operational efficiencies. Ultimately, the merger is expected to result in a financially sustainable enterprise that ensures the continued availability of cash services across Australia.
The cash-in-transit industry has experienced a structural decline due to the decreased use of cash as a payment method. However, the ACCC acknowledges that cash still plays a crucial role in specific sectors of the economy. Without the merger, either Prosegur or Armaguard might have exited the market, which would have had a detrimental impact on the accessibility and availability of cash services. The merger's approval provides a significant public benefit by allowing the transaction to proceed and avoiding a disorderly exit that would disrupt the industry.
Elizabeth Avery, head of the competition and regulation group at G+T, expressed her delight over the ACCC's decision. She emphasised the importance of the merger for Prosegur, enabling them to reaffirm their commitment to the Australian market and establish a leading cash transportation and management business.
"In the face of severe structural industry decline, the ACCC's authorisation is important to ensure the ongoing viability of the cash-in-transit industry and access to cash in Australia, particularly important for vulnerable Australians, Australians living in remote areas without access to electronic payments, and as a backup in times of natural disaster," Avery said.
The G+T team who worked on the deal include partners Louise Klamka and Liana Witt, lawyers Lachlan Green, Johnathon Geagea, and Adrian Vipond. Corporate advisory partner Deborah Johns and her team guided the M&A aspects of the merger.
