ACCC not to oppose acquisition of Wreckair hire business by Coates Limited

The Australian Competition and Consumer Commission will not oppose the proposed acquisition of the Wreckair hire business by Coates Limited, ACCC Chairman, Professor Allan Fels, said today.

Coates Limited is a publicly listed company that operates approximately 100 hire branches throughout Australia. Wreckair Pty Limited is a subsidiary of Brambles Australia Limited and operates approximately 80 hire branches nation-wide.

Both Coates and Wreckair operate general equipment hire businesses as well as specialist hire businesses. Following the acquisition, it appears Coates will be significantly represented in the general commercial and industrial customer segment.

As part of its investigation of the acquisition, the ACCC conducted market inquiries of customers and competitors in each State and Territory. In reaching its view the ACCC examined the likely competitive constraints that Coates would face.

"After our market inquiries, the ACCC has come to the view that the acquisition is unlikely to substantially lessen competition in the equipment hire markets in each Australian State and Territory", Professor Fels said.

"The ACCC found that there are a significant number of competing equipment hire firms in all States and Territories and that these competitors will constrain prices for equipment hire. Coates' competitors appear to be the principal suppliers to the major infrastructure and earthworks customer segment while DIY customers can generally choose among local equipment hire firms. Further, the capacity for hire firms to expand both geographically and across segments is likely to exercise an effective competitive constraint on Coates.

"Accordingly, the ACCC concluded that the proposed acquisition is unlikely to substantial lessening competition".