The Australian Competition and Consumer Commission will not oppose the proposed acquisition of Insulation Solutions from the Amatek Group by Fletcher Building, ACCC Chairman, Mr Graeme Samuel, said today.
Fletcher Building, through its subsidiary Tasman Insulation, and Insulation Solutions manufacture and wholesale a range of thermal and acoustic insulation products, including glasswool batts and blankets and reflective foil.
"In coming to its view, the ACCC considered the likely level of substitution from glasswool products to alternative insulation products, such as cellulose fibre and polyester, in relation to residential, commercial and industrial applications", Mr Samuel said. "The ACCC noted that substitution to these alternative products appeared more limited in respect of residential roofing, commercial roofing, residential ceiling and residential wall applications".
As part of its investigation, the ACCC consulted extensively with the insulation industry including competing insulation manufacturers, hardware retailers and other customers and industry associations.
"Based on the information before it, the ACCC is satisfied that actual and potential glasswool imports would likely provide a credible competitive constraint upon domestic glasswool manufacturers.
"While current levels of glasswool imports are low, the ACCC notes that there are a number of actual and potential independent overseas sources of glasswool batts and blankets of substitutable quality from which customers could source product. Further, glasswool imports at competitive prices have captured a significant share of glasswool demand in Western Australia. The ACCC thus considers that domestic glasswool manufacturers, located on the eastern seaboard, would face a credible threat from imported glasswool that is likely to prevent any exercise of market power.
"Accordingly, the ACCC formed the view that the proposed acquisition is unlikely to substantially lessen competition".
A public competition assessment will be published on the ACCC's website in due course.