Clipsal Australia Pty Ltd - proposed acquisition of Moduline Pty Ltd

Summary

Clipsal Australia Pty Ltd's proposed acquisition of Moduline Pty Ltd.

Market definition

The ACCC considered separate but complementary national markets for electrical products and cable management systems used for commercial and industrial applications.

Competition analysis

The ACCC considered that the merged firm would face sufficient competitive constraints in the event of a price increase or reduced services for its electrical or CMS products. This conclusion is informed by the following factors:
- to the extent that the merged firm will possess any market power in electrical products and/or CMS, the ACCC considered that attempted leveraging in the form of bundling, tying and other financial incentives, would be unlikely to succeed due to the likely response of customers in the face of such leveraging;
- in particular, there would remain alternative suppliers for electrical and CMS products to whom customers could turn in the event of a price rise by the merged firm;
- although there is not an alternative supplier providing an integrated package of CMS and electrical products, inquiries indicate that existing CMS and electrical product suppliers could form teaming arrangements to provide a viable alternative bundle to the merged firm or enter into the supply of the complementary product as barriers to entry for the relevant markets appear to be low;
- although imports of CMS are unlikely to be an effective constraint, there appears to be significant actual and potential import competition in relation to electrical products; and
- customers would appear to have significant countervailing power.