The Commerce Commission has published a statement of preliminary issues relating to an application received from Mr David Ferrier on 12 December 2008, seeking clearance for himself, or his company, New Zealand Woolscourers Limited, concerning the acquisition of certain assets of Godfrey Hirst New Zealand Limited and shares in Cavalier Wool Holdings Limited.

The statement of preliminary issues is a new part of the Commission's clearance process which arose out of consultation with the business community in 2008. The Commission will now routinely issue a statement of preliminary issues as part of its clearance process.

The Commission's statement of preliminary issues and the public version of the application can be accessed via the Commission's website www.comcom.govt.nz under the Clearances Register. The statement of preliminary issues outlines the key competition issues the Commission currently considers that will be important in deciding whether or not to grant clearance.

In summary, the key issues that the Commission will consider at this stage of the investigation are:

  • the competitive constraint from New Zealand Wool Services International Limited, the only remaining alternative supplier of wool scouring services post-acquisition;
  • the constraint from offshore scouring;
  • the level of excess capacity in the wool scouring industry pre- and post-acquisition;
  • the scope for entry or re-entry into wool scouring post-acquisition;
  • the scope for coordinated market power; and
  • the competitive impact of an undertaking to divest Godfrey Hirst's wool dumping assets to another party.

The Commission also invites submissions from interested parties who consider that they have information relevant to the Commission's consideration of this matter. Submissions can be sent to registrar@comcom.govt.nz with the reference Woolscourers Application in the subject line of your email or to

PO Box 2351, Wellington

6140 by 5pm on Monday 9 February 2009.

 

No further comment will be made by the Commission until the outcome of the clearance application is announced.

Background

Mergers and Acquisitions Clearance Process Guidelines were issued by the Commerce Commission in November 2008. These guidelines introduced a new stage in the Commission's process, which is to make public a statement of preliminary issue for clearance application received.

The guidelines can be downloaded from the Commission's website www.comcom.govt.nz under Resources/Mergers and Acquisitions Clearance Process Guidelines. 

Statement of preliminary issues outlines the key competition issues the Commission currently considers will be important in deciding whether or not to grant clearance. The issues highlighted in a statement are based on the information available at the time of publication and may change as the Commission's assessment of the application for clearance progresses. Therefore, the issues highlighted in a statement of preliminary issues are no way binding on the Commission.

The statement of preliminary issues provides an opportunity for all interested parties to consider the issues identified by the Commission and is intended to facilitate the submission of further information by the merger parties and other interested parties that might assist the Commission's assessment of the application.