Acquirer: MM Kembla Copper Systems; Target: McKechnie Metals Pty Ltd

Acquirer(s)

  • MM Kembla Copper Systems

Target(s)

  • McKechnie Metals Pty Ltd

Summary

MM Kembla New Zealand Limited proposes to acquire the MCK Metals plumbing tube business in Australia and New Zealand.

Market definition

The relevant market was found to be the national market for plumbing tube.

Competition analysis

It appears that the proposed acquisition would not lead to a substantial lessening of competition in the national market for supply of plumbing tube for the following reasons:

- local and imported plastic plumbing tube appears to be a substitute for copper tube and has taken market share from copper tube for several years;

- sustained and significant levels of copper and plastic tube imports independent of the parties appear to exercise a strong competitive constraint on the market, with a market share of approximately 20 per cent;

- substantial competitors in Australia and overseas face few constraints in increasing production or imports respectively; and

- four organised, large and well informed customers account for 90 per cent of sales of plumbing tube in Australia.

Merger type

Horizontal

Guidelines thresholds

Crossed

Imports above 10%

Yes

Initiation

Parties

ANZSIC code

2769