The Commerce Commission has cleared Works Civil Construction Limited to acquire Bitumix Limited.
Works Civil is a wholly owned subsidiary of Downer and Company Limited. It is involved in civil engineering activities including state highway and local authority road maintenance and construction.
Bitumix is a wholly owned subsidiary of BP Oil New Zealand Limited. Its principal business activity is the provision of road sealing services.
The Commission's Commerce Act Manager, Jo Bransgrove, said that the Commission was satisfied that, should the acquisition go ahead, Works Civil would not acquire or strengthen a dominant position in the market for the provision of roading construction and maintenance services in New Zealand.
The combined entity's market share would be within the safe harbours published in the Commission's Business Acquisitions Guidelines and strong national and regional competitors would remain.
The safe harbours are no more than 40 percent market share or no more than 60 percent if at least one competitor has no less than a 15 percent share.
In addition, the main buyers in the market, Transit New Zealand and local authorities, have considerable countervailing power.
Background
The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any markets. Parties can apply for a clearance, which will be granted if the Commission is satisfied that dominance is not acquired or strengthened.
A clearance, if granted, protects an acquisition from legal challenge under the Act.
Media contact: Commerce Act Manager Jo Bransgrove
Phone work (04) 498 0958
Communications Officer Vincent Cholewa
Phone work (04) 498 0920
Commission media releases can be viewed on its web site www.comcom.govt.nz
