ACCC clears Danks acquisition
November 11, 2009
Woolworths Limited (WOW) said the Australian Competition and Consumer Commission would not oppose the proposed acquisition of Danks Holdings Limited in a joint venture with US home improvement retailer Lowe’s. The Australian supermarket said the JV plans to develop a network of company-owned 'big box' home improvement stores as part of the joint venture’s entry into the hardware sector.
The ACCC originally had concerns out the effect of the proposed acquisition on competition between hardware retailers.
“In particular, the ACCC was concerned that the joint venture could discriminate against some of its wholesale customers, namely hardware retailers supplied by Danks, who would also be its retail competitors,” Woolworths said in a statement released Wednesday afternoon.
”As a result, the ACCC has accepted court enforceable undertakings from the joint venture in order to address these concerns.”
The ACCC originally had concerns out the effect of the proposed acquisition on competition between hardware retailers.
“In particular, the ACCC was concerned that the joint venture could discriminate against some of its wholesale customers, namely hardware retailers supplied by Danks, who would also be its retail competitors,” Woolworths said in a statement released Wednesday afternoon.
”As a result, the ACCC has accepted court enforceable undertakings from the joint venture in order to address these concerns.”
ACCC chairman Graeme Samuel said with the undertakings in place the ACCC considers the proposed acquisition unlikely to result in a substantial lessening of competition.
"The undertakings importantly impose requirements that will lower barriers that independent hardware stores supplied by Danks otherwise faced in switching to alternative suppliers,” Mr Samuel said.
At the close of trade Wednesday, Woolworths shares were trading at $28.14.
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