Commission clears acquisition of some Alliance Textiles and Coats Patons assets
Published09 May 1997
The Commerce Commission yesterday evening cleared a business acquisition that would, in effect, merge the New Zealand and Australian knitting yarns and crafts businesses of Alliance Textiles (NZ) Limited and Coats Patons (NZ) Limited.
Under the proposal a new company, Coats Spencer Crafts Limited, would acquire the New Zealand yarns and handicrafts businesses of Alliance and Coats Patons. Alliance and Coats Patons would each own 50 percent of Coats Spencer.
Commission Deputy Chairman Peter Allport said that the Commission was satisfied that, should the proposal go ahead, Coats Spencer would not acquire or strengthen a dominant position in any markets.
The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened. Parties can apply to the Commission for clearance which will be granted if the Commission is satisfied that dominance is not acquired or strengthened.
Alliance manufactures and distributes industrial and hand knitting yarns. A division of Coats Patons, Coats Enzed Crafts, is a wholesaler of hand knitting yarns, patterns, sewing threads, haberdashery and other home sewing and handicraft materials.
The proposal would lead to the aggregation of market share in the market for hand knitting yarns.
Coats Spencer would have a relatively large share of the hand knitting yarns market, but would be constrained by actual and potential competition from imports of hand knitting yarns and finished garments.
"Taking these factors into account, the Commission has concluded that Coats Spencer will not acquire or strengthen a dominant position in the market for hand knitting yarns," Mr Allport said
