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Commerce Commission clears Hirepool to purchase Hirequip

Commerce Commission clears Hirepool to purchase Hirequip

The Commerce Commission has cleared the owner of Hirepool, Bligh Finance Limited, to purchase Hire Equipment Group Limited (Hirequip).

In assessing the clearance application, the Commission looked at the potential impact of the purchase in both heavier and lighter equipment hire services markets. Firstly, a national market for heavy construction and earthworks equipment and, secondly, sub-regional markets for building construction and maintenance equipment.

The Commission assessed the extent to which Hirepool and Hirequip currently compete and whether the loss of that rivalry would lead to a substantial lessening of competition, the test under the Commerce Act.

Commerce Commission Chairman Dr Mark Berry said, “In reaching its decision, the Commission considered that, in the hire of building construction and maintenance equipment, the merged entity would be constrained in each sub-regional market by the presence of existing competitors, low barriers to entry and/or the countervailing power of large customers”.

The Commission did not find any significant business overlap between Hirepool and Hirequip in the hire of heavy construction and earthworks equipment.

“As a result, the Commission is satisfied that the proposed acquisition would be unlikely to substantially lessen competition in any of the relevant markets,” said Dr Berry.

A public version of the full written reasons for the decision is now available on the Commission‘s website at www.comcom.govt.nz/clearances-register

Background

Bligh Finance applied for clearance in October to acquire up to 100% of the shares and/or assets of Hirequip. Hirepool and Hirequip are rental businesses that primarily hire out general construction and building equipment. They also hire out other more specialist items including motor vehicles, marquee and event equipment, portable toilets, and portable buildings.

When considering a proposed merger, the Commission must decide whether the competition that is lost in a market when two businesses merge is substantial. We will give clearance to a proposed merger only if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.

A fact sheet explaining how the Commission assesses a merger application is available on the Commission’s website: www.comcom.govt.nz/merger-assessment/

ENDS

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