Commission clears Pacific Dunlop to acquire underwear and hosiery businesses and assets
Published29 Feb 2000
The Commerce Commission today cleared Pacific Dunlop Holdings (NZ) Limited to acquire certain assets and businesses of LWR Hosiery and Underwear Limited (LWR) and R&WH Symington Limited.
Commission Chair John Belgrave said that the Commission was satisfied that, should the acquisition go ahead, Pacfic Dunlop would not acquire or strengthen a dominant position in any of the seven relevant apparel markets.
In three markets the combined entity would have market shares outside the Commission's "safe harbours" but would be constrained by the ability of existing competitors to expand, the availability of imported products and the buying power of customers, particularly nation-wide retail chains.
If the combined entity attempted to increase prices or reduce services, then customers could switch to other suppliers and imports.
The Commission's safe harbours are:
40 percent market share if there is no significant competitor, and
60 percent market share if at least one competitor has 15 percent or more of the market.
In this case, the markets where the combined entity would be outside the safe harbours are the national markets for the manufacture and supply of:
men's underwear
thermal underwear, and
adult socks.
The other markets in which the combined entity would operate but would be inside the safe harbours or in which there would be no aggregation of market power are the national markets for the manufacture and supply of:
women's underwear
children's socks
bras, and
pantyhose.
Background
The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any market.
Parties can apply for a clearance, which the Commission will grant if it is satisfied that dominance is not acquired or strengthened.
A clearance, if granted, protects an acquisition from court action under the Act.
