The Australian competition regulator has cleared Metcash’s proposed acquisition of the Home Timber & Hardware (HTH) chain, owned by a joint venture of Woolworths Ltd and Lowe’s.
Rod Sims, the Chairman of the Australian Competition and Consumer Commission, admitted that the decision was one of the more difficult ones of his career. He admitted that the deal would reduce competition in the market but noted that “the test we have to apply is does it in all the circumstances substantially lessen competition?”
The deal will see Metcash add the HTH chain to its existing Mitre 10 chain, although reports said it plans to retain both banners. The ACCC said Metcash’s recent undertakings (which can be enforced by law) will help it from abusing its position in the market. Sims also added: “In 80 or 90% of Australia people have an alternative to go to Bunnings, which has a pretty sharp offering and so that constrains Metcash’s market power and its ability to substantially lessen competition”.