SummaryCapral Aluminium Limited - proposed acquisition of Crane Group Limited's aluminium business. Capral is predominantly in the aluminium extrusion manufacturing and distributing business, operating in a number of sectors including residential and commercial windows and doors (and geometric shapes). Crane is a major distributor of plumbing and electrical supplies in Australia and New Zealand and a leading manufacturer of plastic pipeline systems and non-ferrous metal products. Only Crane's aluminium business is being acquired by Capral as part of the proposed acquisition, being the three business lines: Crane Aluminium Extrusions, Crane Aluminium Systems and Smart Aluminium.
Market definitionThe ACCC assessed the impact of the acquisition on the national markets for the manufacture, finishing (power coating) and distribution of extruded aluminium products.
Competition analysisThe ACCC concluded that the acquisition is not likely to result in a substantial lessening of competition in the markets for the distribution and powder coating of aluminium extrusions. In coming to this decision, the ACCC had regard to the level of market concentration post acquisition and the post acquisition market share of Capral, coupled with the availability of alternative suppliers in each of these markets.
In the national market for the manufacture of aluminium extrusions the proposed acquisition would result in a significant increase in market share of Capral however, having regard to the merger factors, the ACCC concluded that the proposed acquisition would be unlikely to result in a substantial lessening of competition primarily because:
- current and future import competition has been, and will continue to be, aggressive and will act as a major constraint on Capral post acquisition;
- the market for the distribution of aluminium extrusions is competitive and participants are likely to respond to alleviate any perceived or real barriers to importing; and
- barriers to entry are not so high as to prevent new entrants in the form of fabricators or distributors vertically integrating or other participants with contractual or other relationships with fabricators entering the extrusion market.
The ACCC will continue to monitor import levels in the aluminium extrusion industry and any anti-dumping claims in relation to aluminium extrusion imports.