It looks like Woolworths will soon be a part of the hardware sector, after the Australian Competition and Consumer Commission gave the retailer the green light in its proposed takeover of Danks Holdings Limited.
The ACCC has declared that it will not oppose the takeover plans of Woolworths and its joint venture partner Lowe’s in the acquisition of Danks Holdings, after it accepted court enforceable undertakings from both parties.
Under the new venture, Woolworths and Lowe’s plan to develop a network of company-owned ‘big box’ home improvement stores in competition with other retailers including Bunnings.
The ACCC had to review the process because the joint venture would acquire Danks, a wholesale distributor of hardware products and related services to independent retailers, including those under the Home Hardware and Thrifty-Link banners.
The main concern issued by the ACCC, was the effect it would have on competition between hardware retailers and whether it would discriminate against some of its wholesale customers, namely those supplied by Danks, who would also be its competition.
But after a lengthy review process and the undertakings issued by both parties, the ACCC has decided to support the acquisition.
“With these undertakings in place the ACCC considers the proposed acquisition unlikely to result in a substantial lessening of competition,” said ACCC chairman Graeme Samuel.
“The undertakings importantly impose requirements that will lower barriers that independent hardware stores supplied by Danks otherwise faced in switching to alternative suppliers.”