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ACCC approves Metcash bid for HTH

Bunnings could soon have a new rival in the $46 billion home improvement market, with Metcash poised to merge its Mitre 10 business with Woolworths’ Home Timber and Hardware business. Source:

The competition watchdog announced it would not oppose Metcash’s bid for HTH after the supermarket wholesaler promised to let stores buy products from suppliers other than Mitre 10, making Metcash the front runner to buy the hardware store chain.

If it is successful, the merged companies will become a $2.2 billion monopoly wholesaler to rival Bunnings, the undisputed king of hardware, boosting Metcash’s market share from 3% to 5%.

It will include 800 stores operating under the Mitre 10, True Value Hardware, Home ­ Timber & Hardware and Thrifty Link brands, plus wholesale to unbranded independent hardware stores.

The merger would leave the nation with only one full-service hardware wholesaler; Bunnings buys direct from suppliers.

Anchorage Capital Partners, the private equity group behind the Dick Smith float, is also understood to have bid for HTH, along with Blackstone Group and a syndicate led by two former HTH executives.

If it is the successful bidder Metcash may face a tough battle to keep the merged retailers together, ACCC chairman Rod Sims warned, with a potential exodus of HTH franchisees flagged.

“Metcash will have to watch themselves because they’ve got to keep stores viable relative to Bunnings otherwise they’ll lose them and lose business,” Mr Sims said.

“And if they don’t look after their stores there’s a chance those stores will break away.”

Metcash, which already owns Mitre 10 hardware chain, made a court-enforceable undertaking to address the Australian Competition and Consumer Commission’s concerns that the deal would leave it as the only full-service wholesale options for independent hardware and home improvement retailers.

“We decided to accept Metcash’s undertaking, which should provide independent retailers with the ability to bypass Metcash by using buying groups or negotiating directly with manufacturers. This should also facilitate entry by any new wholesaler that may emerge,” Mr Sims said in a statement.

Woolworths’ other troubled home improvement chain, Masters, is expected to be sold separately from HTH; Blackstone Group and a consortium backed by property group Charter Hall are understood to have made offers.

Shares in Metcash, widely viewed as the frontrunner for the $200 million purchase of Home Timber & Hardware, jumped 2.4% in the wake of the revelation.