ACCC Grants Metcash Majority Stake Purchase In Total Tools
The ACCC has advised it will not oppose Metcash’s majority interest acquisition of Total Tools Holdings, the franchisor of the Total Tools network, asserting it will still face “strong competition” from Bunnings.
ASX-listed Metcash is a wholesaler and retailer of hardware and home improvement products via its Independent Hardware Group (IHG), encompassing Mitre 10, Home Timber & Hardware, True Value Hardware and Hardings, and Thrifty-Link Hardware.
Metcash has proposed to acquire a 70% majority interest in Total Tools holdings.
The ACCC considers IHG outlets to compete more closely with ‘multi-category hardware stores’ such as Bunnings, whilst Total Tools competes with those and other tool specialists such as Sydney Tools.
IHG operates several company-owned, joint venture and independent stores, whilst Total Tools Holdings runs 80 independent franchised stores and one company-owned outlet.
“We saw that generally Mitre 10 focuses on the DIY customer and those looking for convenience, while Total Tools mainly attracts trade customers because of their extensive range of trade quality products and specialised staff,” states ACCC Chair, Rod Sims.
“We have seen a lot of activity in the tool industry this year. Bunnings is the clear market leader, and with IHG increasing its footprint, any further consolidation of the tool market at a national, state or local level will be scrutinised closely.”
The regulator considered whether Metcash would be incentivised to foreclose rivals, and concluded the proposed acquisition was unlikely to prompt any vertical competition issues of concern.