Commission closes investigation into Fulton Hogan’s acquisition of Stevenson’s construction materials business
Published15 Oct 2018
The Commerce Commission has closed its investigation into Fulton Hogan’s acquisition of Stevenson Group Limited’s construction materials business as its concerns with the transaction have been addressed.
In June this year the Commission opened an investigation under section 47 of the Commerce Act primarily due to concerns the acquisition could have reduced competition for the production and supply of aggregates (granular rocks, gravel or sand typically used in roading and construction) in Auckland and North Waikato.
Fulton Hogan and Stevenson both own and operate quarries in Auckland and Huntly. Fulton Hogan had not sought clearance for the acquisition under the Commission’s merger regime.
Deputy Chair Sue Begg said Fulton Hogan had since agreed not to acquire Stevenson’s Huntly quarry as part of the transaction and it had now been formally excluded from the purchase.
“The decision to remove the Huntly quarry from the transaction addresses our concerns in this case. We are satisfied that Fulton Hogan’s purchase of Stevenson’s Auckland quarry assets is unlikely to substantially lessen competition given the presence of other competitors in this market and we have now closed our investigation,” Ms Begg said.
The reasons outlining the Commission’s decision are available on the case register.
Section 47 of the Commerce Act prohibits acquisitions that are likely to substantially lessen competition. The Commission administers a voluntary regime that allows firms to apply for clearance if they consider their planned acquisition could raise competition issues. If firms do not apply for clearance, the Commission can initiate an investigation into a proposed or completed merger under Section 47. If a person breaches Section 47 they may be subject to a penalty of up to $500,000 for an individual or $5 million for a firm.