FRH Group Pty Ltd - proposed acquisition of Frimokar (Aust) Pty Ltd

Acquirer(s)

  • FRH Group Pty Ltd

Target(s)

  • Frimokar (Aust) Pty Ltd

Summary

FRH Group proposes to acquire the assets of Frimokar that are used to retexturise and clean road surfaces using high pressure water sprays.

Market definition

This proposed acquisition was assessed within the context of the market for road and runway cleaning and re-texturising using high pressure water sprays. The ACCC's conclusion would have been unchanged if a broader market were adopted. The geographic market is unclear but is likely to be at least the east coast of Australia.

Competition analysis

On 8 August 2007, the ACCC formed the view that the proposed acquisition was unlikely to result in a substantial lessening of competition in the relevant market. Factors informing this conclusion included:
-the likelihood that FRH would continue to be constrained by current and potential new entrants, due to relatively low barriers to entry; and
-FRH's and Frimokar's customers run sophisticated tender processes through which they can facilitate new entry in the event of any attempt by the merged entity to increase prices.

Timeline

DateEvent
16/07/2007ACCC commenced review under the Merger Review Process Guidelines.
03/08/2007Closing date for submissions from interested parties.
08/08/2007ACCC announced it would not oppose the proposed acquisition.