On 6 July 2006 the ACCC announced that it would oppose the proposed acquisition of Wattyl Limited by Barloworld.
After conducting a comprehensive investigation and making inquiries among industry participants, the ACCC formed the view that the proposed acquisition was likely to substantially lessen competition for the manufacture and supply of architectural and decorative (A&D) paints in Australia.
Wattyl and Barloworld are the second and third largest suppliers of A&D paints in Australia, and the merged firm would account for more than half of total sales. The merged firm and Orica, which is currently the largest supplier, would together account for approximately 90 per cent of A&D paint sales.
Market inquiries demonstrated that Barloworld and Wattyl vigorously compete for second position in the market and are each other’s main competitors, but are also clearly competing with the market leader, Orica. The proposed acquisition is likely to remove this competition and lead to increased prices for consumers.
The ACCC considered Barloworld’s proposal to divest certain Bristol assets, as well as other submissions made by Barloworld, following the ACCC’s publication of its Statement of Issues in March 2006. After wide consultation among industry participants, the ACCC formed the view that Barloworld’s divestiture proposal was not sufficient to resolve the ACCC’s competition concerns.
