Acquirer: Pioneer Construction Materials Pty Ltd; Target: Giacci Concrete Pty Ltd

Summary

Pioneer proposes to acquire Giacci Quarry and Pre-mix Concrete businesses in south west Western Australia. After considering a wide range of information, the Commission decided not to oppose this acquisition.

Market definition

The relevant markets are for the provision of quarried hard rock; sand, gravel and limestone; and pre-mixed concrete in south west Western Australian.

Competition analysis

In the market for the provision of sand, gravel and limestone in south west WA there will be no change to the current market structure and Pioneer is merely replacing Giacci as a competitor in this market. Hence, an SLC is unlikely.

In the market for the provision of quarried hard rock and the market for the provision of pre-mixed concrete an SLC is unlikely. There are contraints on the merged entity in the form of countervailing power. The majority of customers interviewed were of the view that their bargaining power would not be affected. The general view in the market was that prices may rise slightly but that this was reasonable, as recent discounting had proven uncommercial and unsustainable. In addition the Commission considered that it was unlikely that the merger will result in the removal of a vigorous and effective competitor. Market inquiries revealed that the investment, pricing and business strategies of Giacci were unsustainable and result in finacial losses to Giacci. In addition, investigations revealed that there are firms in adjacent regions that have the requisite size and infrastructure to enter the market if it seems profitable.

Merger type

Horizontal

Guidelines thresholds

Crossed

Imports above 10%

N/A

Initiation

Parties

ANZSIC code

1419