Sandvik Mining and Construction Australia Pty Ltd - proposed acquisition of SDS Corporation Limited

Summary

Sandvik Mining and Construction Australia Pty Limited proposes to acquire SDS Corporation Limited

Market definition

The ACCC considers that there are two relevant markets:
-the national market for the manufacture and supply of reverse circulation drilling equipment, and
-the national market for the manufacture and supply of percussive drilling equipment.

Competition analysis

The ACCC considers that the proposed acquisition is unlikely to result in a substantial lessening of competition in any relevant market. In relation to the national market for the manufacture and supply of reverse circulation drilling equipment, the ACCC considers that Sandvik does not currently compete in this market, so the transaction is unlikely to result in a substantial lessening of competition.

In relation to the national market for the manufacture and supply of percussive drilling equipment, the ACCC considers that:
-the merged entity will continue to face competition from several competitors;
-there is a high level of imports in the relevant market;
-medium barriers to entry do not appear to be a deterrent to potential domestic and international entrants;
-customers have substantial countervailing power; and
-the presence of several competitors and the threat of potential entrants makes it unlikely that the merged entity will be able to raise prices and profit margins.

Consequently, the ACCC has concluded that the proposed acquisition is unlikely to lead to a substantial lessening of competition in this market.

Merger type

Horizontal

Initiation

Parties