Woolworths Limited and Lowe's Companies Inc (Joint Venture) - completed acquisition of Gunns Retail Division

Summary

The Joint Venture acquired the Gunns Retail Division of Gunns Limited in Tasmania on 1 June 2010.

Market definition

The ACCC did not consider it necessary to form a concluded view in relation to market definition. However the ACCC analysed the likely impact of the acquisition on various wholesale and retail markets for the supply of hardware products in Northern Tasmania.

Competition analysis

The ACCC reviewed the completed acquisition of Gunns Retail Division in conjunction with a review of the proposed acquisition of Becks Pty Ltd (see 42175).

The ACCC considered that the variation to the undertaking (described below) would sufficiently address any vertical foreclosure or discrimination effects that may otherwise have arisen as a result of the acquisition.

The acquisition, when viewed with the proposed acquisition of Becks Pty Ltd, would give the Joint Venture two retail hardware operations in Launceston. The ACCC did not consider this was likely to lead to a substantial lessening of competition as it considered that the existing and likely future operators of hardware stores in the region would, over the medium and long term, be able to constrain an attempt by the Joint Venture to raise prices or reduce quality of service.

Undertakings

On 2 June 2010, the ACCC consented to a variation to the s87B Undertaking given by Woolworths Limited (Woolworths) and Carboxy Pty Limited (Carboxy) (together the Parties) on 11 November 2009. The Undertaking was accepted by the ACCC in order to resolve competition concerns which would otherwise have resulted from the acquisition of Danks Holdings Limited by a joint venture between Woolworths and Lowe's Companies Inc. Carboxy is the incorporated joint venture vehicle. The purpose of the variation was to: (i) extend the operation of the Undertaking to hardware stores of any size, (ii) vary the geographic scope of the obligations from 5km to 10km, and (iii) make clear that the Undertaking applied in respect of the acquisition of hardware stores by the joint venture or any of the Parties.