The proposed acquisition of Adelaide Tools and Oaklands Mower Centre by Bunnings Group won’t be opposed, after the ACCC decided the transaction isn’t likely to substantially lessen competition.
The ACCC carefully assessed the acquisition’s impact in the Adelaide metropolitan area, given the competition between Bunnings and Adelaide Tools for retail supply of tools and equipment in Adelaide, .
“It should come as no surprise that we would conduct a close review when Bunnings acquires a competitor, given that it has a very dominant position in the one-stop-shop warehouse format in Australia. Although Bunnings has a clear overall focus on the DIY segment, it does market heavily to attract trade customers and is focussed on growing its tool sales to tradespeople.” ACCC Chair Rod Sims said.
“Although Bunnings closely competes with the trade-focused tool and equipment specialists, the differences between Bunnings and the Adelaide Tools businesses and the existence of large expanding specialist tool retailers, such as Total Tools (with six stores in Adelaide) and Sydney Tools (which intends to open stores in every state and territory), meant that we didn’t consider the threshold of a substantial lessening of competition was reached.”
“However, anything that further entrenches Bunnings’ position, or attempts to remove current or potential future competitive threats to Bunnings, will be very closely scrutinised,” Mr Sims said.
“The ACCC’s decision not to oppose this deal should not be read as an indication that the ACCC will take a similar view on future possible acquisitions by Bunnings. Expansion into more specialist retailing in particular segments by acquisition of existing competitors, as opposed to organic growth, will be very carefully considered.”
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Background
Bunnings Group is owned by Wesfarmers, and trades as Bunnings Warehouse. It operates 302 hardware stores throughout Australia, including 15 warehouses and two Bunnings Trade Centres in the Adelaide metropolitan area.
Adelaide Tools is a privately owned business that sells tools, tool accessories and outdoor power equipment, primarily to trade customers in five locations in Adelaide. It also owns and operates the Oaklands Mower Centre, which sells outdoor power equipment.
Wesfarmers also owns and operates Blackwoods, which supplies a range of industrial supplies, including tools, to industrial customers.
