Metcash expected to finalise acquisition of Home Timber and Hardware
Independent supermarket wholesale group, Metcash, is expected to finalise its acquisition of Woolworths’ Home Timber and Hardware by the end of this week.
One Wednesday 24 August 2016, Metcash requested a trading halt from the Australian Securities Exchange (ASX), until it can make an announcement regarding its attempt to acquire Home Timber and Hardware. The halt is expected to last until the commencement of trading on Friday 26 August 2016.
Woolworths has also requested a trading halt until Thursday 25 August 2016.
Metcash, which owns hardware chains Mitre 10 and Trade Value, has been trying to acquire Home Timber and Hardware after Woolworths announced its intentions to sell or close the chain in Janruary 2016 . At the same time as Woolworths said it would be either selling or closing its Masters home improvement chain which accumulated AUD$ 600 million in losses since its establishment six years ago.
ACCC will not stop acquisition
Metcash’s desire to acquire Home Timber and Hardware became publicly apparent in July 2016 when the Australian Competition and Consumer Commission (ACCC) invited comment on the proposed acquisition before deciding if it would allow for it to proceed.
After the feedback process, the ACCC said it would allow for the acquisition to go ahead provided that Metcash follows a court-enforceable undertaking addressing concerns over the acquisition:
- That Metcash must not restrict independent hardware stores from acquiring products from non-Metcash sources
- Metcash must not favour its own hardware stores over nearby independent stores.
Metcash’s other hardware investments, Mitre 10 and Trade Value, are the only other full-service wholesale options for independent hardware and home improvement retailers within Australia.
After the acquisition Metcash will be responsible for 900 hardware stores across Australia, valued at AUD $2.2 billion annually. At that size, it will seriously rival Wesfarmers Bunnings which until now has dominated household hardware in Australia.
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