The ACCC announced on 2 March 2005 that it would oppose the proposed acquisition by Pacific Brands Ltd of Joyce Corporation Ltd based on its investigations and market inquiries which revealed significant and wide ranging competition concerns.
Pacific Brands is a publicly listed company that markets a large range of products including polyurethane foams through Dunlop Foam. Dunlop Foam has production facilities in Melbourne, Sydney, Brisbane and Perth. Joyce is a publicly listed company that manufactures foam and polystyrene. Joyce has manufacturing plants in Queensland, New South Wales, South Australia and Western Australia. It supplies a variety of foams to the furniture, bedding, automotive and other industries.
The ACCC’s market inquiries showed that:
Dunlop Foams and Joyce are each others most significant market constraint and that an existing competitor or new market entrant would need to invest very substantially to compete with Dunlop Foams and Joyce to be in a position to constrain the merged entity
market participants were concerned that the vertical integration of Dunlop Foams and Dunlop Bedding would give the latter a competitive advantage over other domestic bedding manufacturers
imported furniture and bedding products did not stimulate market competition universally across low, middle and high end sections of the furniture industry.
Taking these factors into account the ACCC considers that the proposed merger would likely result in a substantial lessening of competition, in contravention of s. 50 of the Trade Practices Act.
