Commission clears Caroma to buy some James Hardie assets
Published01 May 1997
The Commerce Commission yesterday evening cleared Caroma Industries (NZ) Limited to acquire the assets of James Hardie Building Products Limited's bathroom products operation.
Commission Deputy Chairman Peter Allport said that the Commission was satisfied that Caroma would not acquire or strengthen a dominant position in either of the relevant markets. These are the wholesale distribution markets for toilet ware and wash hand basins.
The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any markets. Parties can apply to the Commission for a clearance which will be granted if the Commission is satisfied that dominance is not acquired or strengthened.
In the wholesale distribution market for toilet ware Caroma would acquire a large market share, more than 60 percent, if the proposal were to go ahead.
However, most products in this market are imported, there are no restrictions on imports, tariff rates are being reduced, and existing competitors could readily increase importation to constrain Caroma.
None of the large retailers spoken to by the Commission believed that the proposed acquisition would result in them losing bargaining power or choice of product. In addition, retailers said they can import products themselves if they wish to, and at least one has done so in the past.
In the wholesale distribution market for wash hand basins Caroma would have a considerably smaller market share than in the toilet ware market. The ability of competitors and customers to constrain it would be even greater.
Mr Allport said that taking all these factors into account, the Commission has concluded that were the proposal to go ahead Caroma would not acquire or strengthen a dominant position in any market.
