Decision Nº M/04/051 from Competition and Consumer Protection Commission, 2005-01-06

• Jurisdiction: Ireland
• Parties: Grafton Group plc,Heiton Group plc
• Date: 06 January 2005
• Decision Date: 06 January 2005
• Status: Cleared with conditions (Phase 2)
• Court: Competition and Consumer Protection Commission (Ireland)
• Decision Number: M/04/051

6th January 2005

NEWS RELEASE

The Competition Authority clears Grafton’s acquisition of

Heiton following a full investigation

The Competition Authority announced today (6th January) that it has approved

the proposed acquisition by Grafton Group plc of Heiton Group plc with two

conditions. Both parties are involved in provision of retail DIY and builders

merchanting services. Grafton and Heiton are public limited companies, and are

both listed on the Irish and London Stock Exchanges.

The Competition Authority received notification of the proposed acquisition on

10th September 2004. The Authority is required under the Mergers and

Acquisitions section of the Competition Act 2002 to determine whether the result

of the proposed acquisition will “substantially lessen competition” in markets for

goods or services in the State.

On 17th November the Authority announced its decision to carry out a full (Phase

2) investigation in relation to the proposed acquisition. This decision came after

a preliminary investigation (Phase 1), where the Authority had been unable to

conclude without further investigation that the transaction will not substantially

lessen competition.

The Authority’s investigation of the proposed acquisition examined the effect on

competition in the provision of retail DIY and builders merchanting services.

According to Ted Henneberry, Director of the Mergers Division in The Competition

Authority, “These companies operate in important sectors of the economy where

any significant reduction in competition could damage individual consumers,

construction businesses and related trades. We have reached our decision after

several months of intensive investigation. One of the critical factors is that entry

and expansion of rivals has already had a significant pro-competitive effect in this

industry. Our investigation demonstrated that there will be continued entry and

expansion throughout the country.”

Text of The Competition Authority’s Determination

Having completed its full investigation, the Competition Authority, in accordance with

Section 22(3)(c) of the Competition Act 2002, has made a conditional determination,

effective from today’s date, that the result of the proposed acquisition will not be to

substantially lessen competition in markets for goods or services in the State, if the

following specified conditions are complied with.

Condition 1: For three years from the date on which the acquisition is put into effect, the

Grafton Group and its successors will inform the Authority in advance of all proposed

mergers or acquisitions in the builders’ merchants sector in the State, in which it is

involved, and will notify such proposed transactions in accordance with Section 18(3) of

the Competition Act 2002 when requested to do so by the Authority.

Condition 2: Pursuant to Section 22(6) of the Competition Act 2002, the acquisition must

be put into effect within 12 months after the making of the determination.

ENDS

For further information contact:

Mark Garrett, Communications Manager, The Competition Authority

Tel: 01 8045406 Mobile: 086 601 9655 email: mg@tca.ie

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