Source: Radio New Zealand
RNZ / Alexander Robertson
- Commerce Commission to issue detailed concerns about Bremworth takeover
- Takeover would join Bremworth with rival Godfrey Hirst
- Regulator previously said not convinced deal would not “substantially lessen” competition
- Decision pushed out until end of May
A proposed merger of the country’s top two carpet makers is faces another hurdle after the Commerce Commission said there were competition issues it needed to investigate further.
The regulator said at the end of last year that it was not convinced that a takeover of Bremworth Carpets by US based Mohawk Industries, which owns Godfrey Hirst and Feltex, would not reduce competition.
It was due to make a decision at the end of last week, but signalled at the last minute that it would issue a “Statement of Unresolved Issues”, a detailed rundown of its concerns about the effect the merger would have on carpet making and retailing in New Zealand.
Among the Commission’s previously mentioned concerns were the impact on competition by having the two leading domestic carpet makers and suppliers owned by the same company, the impact on prices, whether there was sufficient competition from other manufacturers or importers, and effect on customers.
It said the statement did not imply that it would either to approve or decline the proposed takeover.
The Commission has extended the deadline for a decision to 29 May.
Bremworth said it would look to have the 1 July deadline for the takeover extended, but that also to shorten the overall timetable for the deal, assuming it is approved by the regulator.
In February, Bremworth warned its earnings were being further hit by tough trading conditions, which could reduce the payout for shareholders if the takeover offer goes ahead.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
