Woolworths Limited and Lowe's Companies Inc (Joint Venture) - proposed acquisition of Becks Pty Ltd
Type of assessment
Informal Review
Reference
42175
Acquirer(s)
Woolworths Limited and Lowe's Companies Inc (Joint Venture)
Target(s)
Becks Pty Ltd
Industry
Hardware and home improvement
Summary
The Joint Venture proposed to acquire Becks Pty Ltd
Outcome of assessment
Not opposed
Total review days *
24
Commenced public review
2nd June 2010
Date completed
6th July 2010
Market definition
The ACCC did not consider it necessary to form a concluded view in relation to market definition. However the ACCC analysed the likely impact of the acquisition on various wholesale and retail markets for the supply of hardware products in Northern Tasmania.
Competition analysis
The ACCC reviewed the proposed acquisition of Becks Pty Ltd in conjunction with a review of the completed acquisition of Gunns Retail Division (see 42174).
The ACCC considered that the variation to the undertaking (described below) would sufficiently address any vertical foreclosure or discrimination effects that may otherwise have arisen as a result of the proposed acquisition.
The proposed acquisition, when viewed with the completed acquisition of Gunns Retail Division, would give the Joint Venture two retail hardware operations in Launceston. The ACCC did not consider this was likely to lead to a substantial lessening of competition as it considered that the existing and likely future operators of hardware stores in the region would, over the medium and long term, be able to constrain an attempt by the Joint Venture to raise prices or reduce quality of service.
Undertakings
On 2 June 2010, the ACCC consented to a variation to the s87B Undertaking given by Woolworths Limited (Woolworths) and Carboxy Pty Limited (Carboxy) (together the Parties) on 11 November 2009. The Undertaking was accepted by the ACCC in order to resolve competition concerns which would otherwise have resulted from the acquisition of Danks Holdings Limited by a joint venture between Woolworths and Lowe's Companies Inc. Carboxy is the incorporated joint venture vehicle. The purpose of the variation was to: (i) extend the operation of the Undertaking to hardware stores of any size, (ii) vary the geographic scope of the obligations from 5km to 10km, and (iii) make clear that the Undertaking applied in respect of the acquisition of hardware stores by the joint venture or any of the Parties. 2nd June 2010 D10+3621893.pdf (559.1 KB)
Review timeline
Date
Event
2nd June 2010
ACCC commenced review under the Merger Review Process Guidelines.
16th June 2010
Closing date for submissions from interested parties.
30th June 2010
ACCC timeline suspended to allow it to consider further information provided by the merger parties.
6th July 2010
ACCC announced it would not oppose the proposed acquisition.
* Total Review days = Total business days less public holidays and time during which the review was suspended.
