WESFARMERS LIMITED The Australian Competition and Consumer Commission has decided not to oppose Coles' proposed acquisition of five Supabarn supermarkets in NSW and the ACT. Coles is owned by Wesfarmers (ASX: WES).
Coles originally proposed to acquire nine supermarkets from Supabarn. The parties restructured the transaction after the ACCC expressed concerns that the proposed acquisition would be likely to substantially lessen competition. Coles now proposes to acquire supermarkets in the Canberra Centre, Kaleen and Wanniassa in the ACT, and Five Dock and Sutherland in NSW.
"The ACCC's review focussed on two main issues. These were the effect of the acquisition upon competition between supermarket chains in the Canberra region and the effect upon each of the individual local markets in which the Supabarn stores operate," ACCC Chairman Rod Sims said.
"We received vocal feedback from members of the public that Supabarn is competitive and has a differentiated offer from that of the other major supermarket chains. This was borne out by our own analysis."
"We were also concerned that the proposed acquisition, as originally structured, would have led to significant competitive harm in some of the local markets in the ACT and NSW. In these areas, Coles and Supabarn stores are located close together, and there is limited competition from other supermarkets."
"However, the deal has since been restructured in a way that removes the most problematic stores, as well as two other stores of lesser concern. It also retains Supabarn as a supermarket chain after the acquisition is completed with Supabarn being free to compete under the Supabarn name," Mr Sims said.
Further information is available from the public register at [link].
Supabarn is a privately owned supermarket operator with nine operating stores in the ACT and NSW and two development sites. Most Supabarn stores are full-line supermarkets of a similar size to a typical Coles or Woolworths store and include a liquor section.
Following completion of the proposed acquisition Supabarn would retain supermarkets at:
Crace, and development sites in Casey and Kingston in the ACT.
Annandale, Gymea and Sans Souci in NSW.
There are also four independently owned stores which operate under the SupaExpress banner. Supabarn provides marketing support and other services to these stores. They are not part of the proposed acquisition.
The ACCC's review initially considered a broader transaction, involving the proposed acquisition of nine Supabarn supermarkets. The ACCC's review of that transaction was suspended on 3 December 2015 at the request of Coles and Supabarn. Today's decision reflects an amended transaction presented to the ACCC on 29 February 2016.
Wesfarmers Ltd. issued this content on 10 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 09 March 2016 22:39:22 UTC
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