The Australian Competition and Consumer Commission will not oppose the proposed acquisition by Gallagher Group of Country Electronics Pty Ltd, trading as Thunderbird, after accepting a court enforceable undertaking.
Gallagher and Thunderbird are both manufacturers of electric fencing energisers and accessories, animal weigh scales and other animal management products used by farmers in Australia. Gallagher has undertaken to divest its 11.86 per cent shareholding in competitor Tru-Test Corporation Limited.
The ACCC engaged in extensive inquires to obtain information from market participants, including wholesale and retail customers of these products. A Statement of Issues was released on 31 January 2013 and the investigation was suspended at the request of Gallagher on 27 March 2013.
“The ACCC ultimately concluded that the acquisition would be unlikely to substantially lessen competition in any relevant market, taking into account the undertaking,” ACCC Commissioner Dr Jill Walker said.
“The acquisition will result in the merged entity holding the largest market share for the provision of electric fence products, however the ACCC considers that the merged entity will be constrained by continuing competition from existing competitors and the threat of expansion.”
“In relation to animal weigh scales, the majority of market participants did not consider Thunderbird’s product to be of a standard equivalent to Gallagher’s weigh scales and therefore did not consider Thunderbird to be a vigorous and effective competitor in this market.”
The undertaking addresses the ACCC’s concerns about the competition effects of Gallagher having a shareholding in its most significant competitor post acquisition, particularly regarding Gallagher and Tru-Test’s incentives to compete vigorously in supplying electric fence products and animal weigh scales.
The ACCC will issue a public competition assessment in due course.
Further information is available on the mergers register.