Fletcher Building Cleared To Acquire CHH Doors

Commission Clears Fletcher Building To Acquire CHH Doors

The Commerce Commission today cleared Fletcher Building Products Limited to acquire the assets, relating to the manufacture of wooden doors, of Carter Holt Harvey Limited's division Carter Holt Harvey Doors (CHH Doors).

Plyco Doors is the Fletcher Building subsidiary that manufactures and distributes doors.

Commission Chair John Belgrave said that the Commission concluded that Fletcher Building would have a large share of the national market for the manufacture and importation of general-purpose wooden doors, but would be constrained by the combination of existing competitors, potential competitors and the countervailing power of buyers.

The major buyers of doors-pre-hanging companies and merchant supply chains-said that there are alternative suppliers available to them and they would have no hesitation in switching if price increased or quality decreased.

Existing competitors, including Australian importers, have been increasing their market shares over the last several years and could continue to expand in future.

The Commission was satisfied that there would be no aggregation of market share in the national market for the distribution of general-purpose wooden doors.

Public copies of the Commission's decision are available from its website, www.comcom.govt.nz, and from reception at its Wellington office, level 7 Landcorp House, 101 Lambton Quay.

Background

Fletcher Building made its application before amendments to the Commerce Act took effect on May 26. At that time the Act prohibited business acquisitions that resulted in dominance being acquired or strengthened in any market. The amended Act prohibits business acquisitions that substantially lessen competition in any market.

The Commission must use the dominance test when it investigates applications made before May 26 and the substantial lessening test when it investigates applications made on or after May 26.

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