The Commerce Commission has given clearance for Fletcher Building Holdings New Zealand to acquire Higgins Group Holdings.
Chairman Mark Berry says the commission is satisfied that the merger will not have, or would not be likely to have, the effect of substantially lessening competition in the affected markets.
“Higgins and Fletcher Building are key competitors of aggregate products in particular regions. However, we consider that strong competition would continue in these regions from existing competitors and the ability of customers to self-supply,” he says.
The clearance covers Higgins’ road surfacing and road maintenance, civil structure and construction products, including most of its aggregates and bitumen businesses. Higgins has not sold its ready mix concrete business and property businesses, which will be transferred to existing Higgins’ shareholders prior to the acquisition.
Fletcher Building also originally applied for clearance to acquire Horokiwi Quarries in Wellington, but amended its application to remove this quarry during the commission’s consideration.
The commission’s consideration of the merger focused on the competitive effects of the merger in the supply of aggregates in regions where Fletcher Building (operating as Winstones) and Higgins overlap, namely North Waikato, Napier, Manawatu-Whanganui, Kapiti and Christchurch. In particular, the commission considered whether the loss of Higgins’ quarry operations in these regions would make it easier for Fletcher Building to raise prices to external aggregate customers such as roading contractors.
A public version of the written reasons for the decision will be available shortly on the Clearances Register.
