Woolworths remedies ACCC concerns with hardware acquisition

The Australian Competition and Consumer Commission will not oppose the proposed acquisition of Danks Holdings Limited by Woolworths Limited and its joint venture partner, Lowe's, after accepting court enforceable undertakings from the joint venture parties.

Woolworths and Lowe's, a United States home improvement retailer, plan to develop a network of company-owned 'big box' home improvement stores as part of the joint venture’s entry into the hardware sector, in competition with other retailers including Bunnings.

As an aspect of this plan, the joint venture proposes to acquire Danks, a wholesale distributor of hardware products and related services to independent retailers, including those trading under the Home Hardware and Thrifty-Link banners.  This acquisition was the subject of an ACCC review.

The ACCC had concerns about the effect of the proposed acquisition on competition between hardware retailers. In particular, the ACCC was concerned that the joint venture could discriminate against some of its wholesale customers, namely hardware retailers supplied by Danks, who would also be its retail competitors.

As a result, the ACCC has accepted court enforceable undertakings from the joint venture in order to address these concerns.

"With these undertakings in place the ACCC considers the proposed acquisition unlikely to result in a substantial lessening of competition," ACCC chairman Graeme Samuel said today.

"The undertakings importantly impose requirements that will lower barriers that independent hardware stores supplied by Danks otherwise faced in switching to alternative suppliers,” he said.

Additionally, the joint venture has accepted obligations that alleviate concerns that Danks stores in close proximity to joint venture big box stores would be treated less favourably than other Danks stores.

The undertaking will be available on the ACCC's website and the ACCC will shortly issue a Public Competition Assessment explaining the reasons for its decision.