Competition concerns in office products market
19 April 2018
Release no. 114
Platinum to divest Winc NZ to address competition concerns in office products market
Platinum Equity LLC (Platinum) has agreed to divest Winc NZ Limited (Winc) to address the Commerce Commission’s competition concerns regarding Platinum’s acquisition of OfficeMax Holdings Limited (OfficeMax).
In November 2017 the Commission joined Complete Office Supplies’ High Court injunction proceedings to prevent Platinum acquiring OfficeMax. Platinum and OfficeMax had not applied for clearance and the Commission was concerned the acquisition would be likely to have the effect of substantially lessening competition in the supply of stationery and office products to large corporate and government customers.
Platinum has provided an undertaking to the Commission and the Court committing to divest Winc to a purchaser approved by the Commission once Platinum acquires OfficeMax. Proceedings will remain before the Court until Platinum has completed the divestment.
The Commission is unable to comment further at this time.
In 2015 the Commission approved a merger clearance application which would have combined the New Zealand businesses of Staples (now owned by Platinum and called Winc NZ Limited) and OfficeMax, as part of a wider global merger. However, the acquisition did not take place within the statutory 12 month timeframe and the clearance lapsed.
Platinum did not apply for clearance for its 2017 proposed acquisition of OfficeMax, and Complete Office Supplies and the Commission sought an injunction preventing Platinum from completing the OfficeMax acquisition.
Section 47 of the Commerce Act prohibits acquisitions that are likely to substantially lessen competition. The Commission administers a voluntary regime that allows businesses to apply for clearance if they consider their planned acquisition could raise competition issues. If firms do not apply for clearance, the Commission can initiate an investigation into a proposed or completed merger under section 47. If a person breaches section 47 they may be subject to a penalty of up to $500,000 for an individual or $5 million for a firm.