Case Write-up: SAGASCO Holdings Mathematics & Economics Case Study

SAGASCO Holdings Case Study
Introduction
During the summer of 1993, the Trade Practices Commission in Australia considered whether to enjoin Santos Limited from permanently acquiring SAGASCO Holding Limited. The merging of the two companies was critical within the trade hierarchy in Australia ADDIN CSL_CITATION {"citationItems":[{"id":"ITEM-1","itemData":{"id":"ITEM-1","issue":"April","issued":{"date-parts":[["2020"]]},"number-of-pages":"1-19","title":"SAGASCO Holdings Limited","type":"report"},"uris":["/documents/?uuid=99436104-4faf-4e8e-8c3a-bb2e671a62f6"]}],"mendeley":{"formattedCitation":"(SAGASCO Holdings Limited, 2020)","plainTextFormattedCitation":"(SAGASCO Holdings Limited, 2020)","previouslyFormattedCitation":"(SAGASCO Holdings Limited, 1992)"},"properties":{"noteIndex":0},"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"}(SAGASCO Holdings Limited, 2020) This is because Santos Limited was the largest onshore natural gas producer, while SAGASCO was the third largest Australian market. Since SAGASCO opposed the merger of the two companies, they argued that authorizing the merger would reduce competition and make Santos Limited monopolize the market. On the other hand, Santos Limited argued that the gas sector was very concentrated, and there was much competition from alternative energy sources. Through the case study, we can see the potential impacts of mergers. Moreover, the policy also reveals the relationships in competition policy and regulation of monopolizing the market.
Question A: Is it appropriate to think of all of Australia as a single geographic market for natural gas? If so, explain why. If not, how would you define the relevant geographic market(s)?
When we consider all the aspects presented within the case study, I can say that it is not appropriate to think of Australia as a single geographic market for natural gas. This is because the country lacks a national readily available wholesale market for gas. The production, transportation, and retailing process is delivered by different companies and is never located within a single geographic market ADDIN CSL_CITATION {"citationItems":[{"id":"ITEM-1","itemData":{"id":"ITEM-1","issue":"April","issued":{"date-parts":[["2020"]]},"number-of-pages":"1-19","title":"SAGASCO Holdings Limited","type":"report"},"uris":["/documents/?uuid=99436104-4faf-4e8e-8c3a-bb2e671a62f6"]}],"mendeley":{"formattedCitation":"(SAGASCO Holdings Limited, 2020)","plainTextFormattedCitation":"(SAGASCO Holdings Limited, 2020)","previouslyFormattedCitation":"(SAGASCO Holdings Limited, 1992)"},"properties":{"noteIndex":0},"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"}(SAGASCO Holdings Limited, 2020). This is also the existence of bilateral contracts between companies that last for several years. The bilateral contracts allow transportation of fuel through pipelines linked to the primary sources of natural gas. Therefore, gas is transpo...