Primo gets ACCC approval to acquire Hans Smallgoods
The competition watchdog has given the all clear to Primo Smallgoods for the proposed purchase of certain assets of Hans Continental Smallgoods.
The decision was made in the belief that, given Hans was likely to collapse without a purchaser, the acquisition would not substantially lessen competition.
“After extensive inquiries with market participants, the ACCC concluded that unless acquired by Primo, Hans would be likely to cease trading imminently and would be liquidated by the administrator. This position was confirmed in information provided by the administrator,” ACCC Chairman Graeme Samuel reported.
After a lengthy and unsuccessful sales process, the Hans business was placed into voluntary administration by its owner in November, at which time the administrator – KordaMentha – commenced a further sales process.
“Following exhaustive inquiries the ACCC formed the view that an acquisition by Primo of Hans, when compared to the situation if Primo did not acquire Hans, would be unlikely to result in a substantial lessening of competition,” Mr Samuel said today.
The ACCC advised that they had taken into account the fact that there were no alternative bids for the Hans business capable of being finalised prior to the administrator being required to take steps to close the business. This position was confirmed in advice received from the administrator.
In addition, the ACCC conducted detailed inquiries into the likely effect on competition if the administrator were to close the business and auction its assets in order to determine whether this would be a less anti-competitive outcome than the acquisition by Primo. The ACCC concluded that there was only limited interest in the assets, and a likelihood that many of the assets would be lost to the industry permanently if sold at auction.
Those which did remain would likely be offline for an extended period before they could be redeployed, affecting their efficacy as a competitive constraint. In these circumstances, and having regard to other confidential information, the ACCC considered that it was unlikely that the competitive situation would be much different with or without the acquisition by Primo.
“If the Hans business had not been in imminent danger of failing, the ACCC considered that substantial competition concerns existed with the proposed acquisition by Primo,” Mr Samuel explained. “However, while the sale of Hans to Primo is likely to result in a reduction in competition compared with the current situation where Hans is operating as an independent competitor, following a rigorous assessment, the ACCC was satisfied that there was no alternative positive outcome for competition in this case.”
“The ACCC will assess any failing firm argument rigorously and will require clear information to show both that the target is likely to fail without the acquisition, and that this is not a better outcome for competition than an acquisition by a competitor,” Mr Samuel added.
Primo proposes to acquire the assets of Hans Continental Smallgoods, including certain inventory and equipment located at the Blacktown manufacturing facility but excluding the Hans Fresh business (which supplies fresh pork), the Blacktown manufacturing facility and the Swickers (Queensland) abattoir and associated pig growing operations.
The Hans Fresh business and Hans interest in the Swickers abattoir and associated pig growing operations are to be acquired by a third party, the Cameron Hall McLean Group.
It was announced last week that the factory would be sold for an undisclosed price to the CHM Alliance, which was already a minority shareholder in Swicker’s and part of an alliance with three of Australia’s largest pork producers.
The ACCC decision allows for continued consolidation of the smallgoods sector in Australia following Don’s purchase of KR Castlemaine last year.
Full details on the decision will soon be avialble at: www.accc.gov.au/content/index.phtml/itemId/861342/fromItemId/751046.
Arnott’s Shapes have been a favourite of many Australians for decades, but a recipe change has gone ...
A number of food and drink producers have taken out sustainability awards at the 2017 Australian Pac...
The Australian Food and Grocery Council has called for targeted investment allowances for Australian...
Woolworths will be removing all single-use plastic bags from its Australian stores by 20 June 2018.
From Southern Tasmania to Far North Queensland, dairy farmers supplying Lion Dairy & Drinks (Lion) a...
TODAY marks the start of Australia’s inaugural Whole Grain Week, run by the Grains and Legumes Nutri...
SEE how the Internet of Things (IoT) is powering a major digital transformation in supply chain mana...
CRAWSHAW, a chain of UK butcher’s shops, has closed 35 stores and one distribution centre resulting ...