The ACCC will not oppose Dormakaba Australia Pty Ltd’s (Dormakaba) proposed acquisition of E Plus Building Products Pty Ltd (E Plus).
Both Dormakaba and E Plus supply key inputs in the fire doors industry. However the companies do not compete at the same level of the supply chain and there is no overlap between the products that they supply.
Dormakaba supplies a range of door hardware and components such as door closers, hinges, handles and locks. E Plus supplies fire cores which form the centre of all fire doors.
“The ACCC investigated whether Dormakaba could hinder rival door hardware suppliers from competing effectively, by denying them certification with E Plus’ fire core,” ACCC Commissioner Stephen Ridgeway said.
“We found that two alternative fire core suppliers would remain in the market with whom hardware suppliers can certify their products. This includes Assa Abloy, which also supplies door hardware and components, and Firecore, a standalone core supplier.”
The ACCC recognised that most hardware suppliers are currently certified with all three core suppliers. However, feedback from the market established that cores do not drive customer choice, that the three cores are largely homogenous, and that hardware suppliers would be able to compete for customers without being certified with all three.
“Even if Dormakaba stopped rival hardware suppliers from certifying with E Plus’ core, this would not substantially lessen competition due to the availability of the other major fire core suppliers,” Mr Ridgeway said.
Further information is available at: Dormakaba’s proposed acquisition of E Plus.
Background
The ACCC is concerned with non-horizontal acquisitions where the merged firm has the ability and incentive to use its position in one market to anti-competitively foreclose rivals in another market in a way that lessens competition.
Hardware and fire cores must be tested and certified together to adhere to Australian Standards for fire door sets. These standards dictate that the fire core supplier have control over the testing process, which enables core suppliers to control the hardware certified for use in combination with their fire core.
Dormakaba is part of the global Dormakaba Group. Its subsidiaries include Kilargo, Madinoz and Resolute Testing Laboratories, a fire door testing facility.
E Plus is an Australian-based supplier, and supplies the 'E-Core' fire door product. Certified E-Core based fire doors are distributed throughout Australia by licenced door manufacturers.