The Australian Competition and Consumer Commission will not oppose the proposed acquisition of Transfield Construction and Walter Construction by the John Holland Group, ACCC Chairman, Professor Allan Fels, said today.
John Holland, Transfield Construction and Walter Construction all operate national construction businesses with interests in civil and other non-building construction, non-residential building construction and road and bridge construction. John Holland is 70% owned by Leighton Holdings, which also has interests in other major Australian construction businesses.
The ACCC considered the impact of the acquisitions on a number of national construction markets in which John Holland, Transfield and Walter have overlapping operations. Investigation showed that the acquisitions will not cross the ACCC’s concentration thresholds in relation to any of these markets. For the purpose of this analysis the Commission considered not only the market share of John Holland, but also the aggregate market share of the Leighton Group.
In addition, the ACCC conducted extensive market inquiries in relation to this matter. These inquiries revealed that following the acquisitions, the remaining major construction companies would impose competitive constraint on the merged entity in relation to both large and smaller construction projects. Further, it was suggested that, while there are barriers to new entry in the construction industry, barriers to expansion facing smaller construction companies are relatively low. This potential expansion and possible new entry would also constrain the merged entity.
On this basis, the ACCC has decided that the acquisitions are unlikely to substantially lessen competition in any market, and consequently will not oppose the proposed acquisitions.