The ACCC has officially given its support for the proposed purchase of OfficeMax by Platinum Equity (owner of Winc i.e. formerly Staples).
The news follows the regulator’s recent announcement which offered support for the sale of OfficeMax to rival organisation Complete Office Supplies (a wholly-owned subsidiary of American-based Office Depot).
After “extensive market inquiries” the ACCC has ruled that the sale of OfficeMax to Platinum Equity “will lessen competition” but “doesn’t reach the threshold of causing a substantial lessening of competition”.
Both Winc and OfficeMax supply office products to large commercial and government customers throughout Australia.
ACCC Chairman, Rod Sims, admits that the proposed sale will require close scrutiny, however, ruling that Winc-OfficeMax will continue to face competition from rivals Complete Office Supplies (COS) and Lyreco:
“Many large commercial and government customers put their contracts out to tender, and both COS and Lyreco have recently been successful in winning customers from Winc and OfficeMax”
“As a result, the ACCC considers that COS and Lyreco, combined with the ability of large customers to switch suppliers and to purchase products off-contract, are likely to provide a sufficient competitive constraint on the combined Winc-OfficeMax”
“The ACCC would also expect that if prices and returns increased through an exercise of market power by a combined Winc-OfficeMax, it is likely that other existing suppliers of office products would seek to grow their market share”.
The ACCC claims that it consulted many commercial and government customers, affirming that for such “horizontal mergers” the watchdog relies heavily on the views of customers.
