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Fletcher to acquire frame & truss plant and building products stores

Fletcher Distribution can acquire Tumu stores and a frame and truss plant. New Zealand’s Commerce Commission has granted clearance for Fletcher Distribution Limited (FDL), a wholly owned subsidiary of Fletcher Building Limited that operates the national network of Placemakers stores, to acquire six building products stores, and a frame and truss manufacturing plant, from Tumu Merchants Limited (Tumu). Source: Timberbiz

The six Tumu stores, which until recently operated under the ITM banner, are located in Gisborne, Napier, Hastings, Havelock North, Dannevirke and Masterton.

The frame and truss manufacturing plant is located in Hastings.

In reaching its decision, the Commission considered the potential impact of the proposed acquisition on competition for the supply of building products to trade customers in the Wairarapa and Hawke’s Bay, as well as national trade customers, predominantly group home builders. It also considered the potential competition impact on the manufacture and supply of frame and truss.

Chair Anna Rawlings says the Commission was satisfied that the acquisition is unlikely to substantially lessen competition in any New Zealand market.

“We are satisfied that the merged entity will be constrained by competition from Carters and Mitre 10 in relation to the supply of building products to trade customers in the Wairarapa and Hawke’s Bay, and Bunnings in the Hawke’s Bay as well,” Ms Rawlings said.

“Further, we are satisfied that the acquisition, and Tumu’s recent exit from the ITM group, is unlikely to significantly impact ITM’s ability to compete for national customers such as group home builders. ITM will still have a significant network of stores across New Zealand.

“The acquisition is also unlikely to increase FDL’s incentive or ability to foreclose rival merchants’ access to key building supplies.

“Finally, we are satisfied that competition in the manufacture and supply of frame and truss is unlikely to be significantly impacted, given the limited pre-merger competition between the parties and the presence of several other manufacturers and suppliers.”