ACCC releases SoI on proposed acquisition of Jennmar Australia by DSI

21 April 2016

The Australian Competition and Consumer Commission has issued a Statement of Issues on the proposed acquisition of the Jennmar Australia ground support business owned by Frank Calandra, Inc (Jennmar) by DYWIDAG-Systems International Group (DSI).

DSI and Jennmar both supply ground support products to mining and civil construction customers. Between them, they supply the vast majority of soft rock bolts (excluding cable bolts) to coal mines in Australia.

“The ACCC is concerned that the proposed acquisition would create a near monopoly and so allow DSI to raise its prices for soft rock bolts or reduce service levels, once it was no longer constrained by competition from Jennmar,” ACCC Chairman Rod Sims said.

“One matter this Statement of Issues seeks to test, however, is the extent to which other suppliers could readily enter the market, or whether customers could import soft rock bolts from international suppliers.”

The Statement of Issues seeks further information on the competition issues which have arisen from the ACCC’s market inquiries to date. The ACCC invites further submissions from interested parties by 12 May 2016. The ACCC’s expected final decision date is 16 June 2016.

The SoI is available at on the public register.

Background

DSI supplies ground control and post-tensioning control systems and concrete accessories to mining, tunnelling and construction customers in more than 90 countries around the world.

Frank Calandra, Inc (FCI, owner of Jennmar) is a privately owned global company, based in the USA, that manufactures and supplies ground control technology to the mining, tunnelling and civil construction industries.

Ground support products are used to stabilise tunnels in mines and some road and infrastructure projects. Rock bolts are rods which are inserted into the rock to hold it together. DSI and Jennmar supply rock bolts for use in soft rock mines (coal mines) and hard rock mines (such as gold, copper, zinc and diamonds). They also supply ancillary products including resins and cementitious grout (which can be used to anchor bolts in the rock) and mesh (to prevent loose rock falling into the tunnel).

The proposed acquisition is part of a global transaction in which DSI has acquired FCI’s ground support businesses in Latin America and Europe and entered into a joint venture in China, and FCI has acquired DSI’s mining ground support business in the USA.
 

Release number: 
MR 56/16
ACCC Infocentre: 

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