Boral Limited - proposed acquisition of Sunshine Coast Quarries

Summary

Boral Limited proposed to acquire Sunshine Coast Quarries Pty Ltd.

Market definition

The ACCC considered the proposed acquisition in the context of:

- regional markets for the supply of quarry products (other than aggregate for use in asphalt production or for road cover) in the Sunshine Coast region and the South Burnett region;
- regional markets for the supply of quarry products for use in asphalt production or for road cover in the Sunshine Coast region and the South Burnett region;

The ACCC also considered the impact of the proposed acquisition in downstream markets for the supply of concrete and asphalt in the relevant regions. For the purposes of the competition analysis, the ACCC did not consider it necessary to form a definitive view regarding market definitions for these markets.

Competition analysis

The ACCC formed the view that the proposed acquisition was unlikely to
substantially lessen competition in the relevant markets. Factors informing this conclusion included:

- the imminent entry into the relevant quarry markets in the Sunshine Coast region by Neilson Group through its Kin Kin quarry; and
- Boral's Coolum quarry is likely to exhaust its resources in the next two years, meaning the proposed acquisition will not result in significant horizontal aggregation in the medium term.

The ACCC considered that barriers to entry in the relevant quarry markets are likely to be high. While the imminent entry of the Neilsen's Kin Kin quarry has occurred on the basis of pre-existing approvals, further greenfield entry in the Sunshine Coast region appears unlikely in the foreseeable future.