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Bunnings gets the green light for Beaumont Tiles acquisition

Published: in Australian News by .

Hardware juggernaut Bunnings has been given the green light to acquire Beaumont Tiles, with Australia’s competition watchdog ruling it would not stand in the way of the takeover.

Hardware juggernaut Bunnings has been given the green light to acquire Beaumont Tiles, with Australia's competition watchdog ruling it would not stand in the way of the takeover.

The Australian Competition and Consumer Commission (ACCC) today said it would not oppose the acquisition on the grounds that Bunnings is not already a strong competitor in the tile sector.

As a result, the acquisition of Beaumont Tiles into the Bunnings portfolio "is not likely to substantially lessen competition".

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Several new exposure sites in the greater Darwin region including a BWS bottle shop, Bunnings Warehouse and highway restaurant.

"At first glance, Bunnings taking over a major tile retailer appears concerning, but our investigation found that Bunnings is not a strong competitor in tile sales. This is not a case of a close competitor buying up its rival," ACCC Chair Rod Sims said.

"However, the ACCC's decision not to oppose this deal is based on the specific circumstances and should not be read as any indication that the ACCC will reach the same conclusion in relation to future possible acquisitions by Bunnings."

Mr Sims the watchdog would be "very carefully" considering any further acquisitions by Bunnings, but in this case found that most tile retailers compete with each other rather than big-box DIY chains such as Bunnings.

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"Specialist tile retailers have a far more extensive range, displayed in dedicated tile showrooms with specialist staff who can provide design and product advice to customers and referrals to tilers. Specialists also have stronger relationships with larger builders, and usually deliver tiles direct to work sites," Mr Sims said.

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"By contrast, Bunnings generally sells small volumes of tiles in-store to Do-It-Yourself customers, and tilers and other tradespeople undertaking small jobs."

Despite the acquisition being unopposed by regulators, not all in the market are pleased with Bunnings' foray into specialist tiling.

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Other tile retailers told the ACCC that they were concerned a combined Bunnings-Beaumont Tiles would come to dominate tiling retailing.

Ultimately, the ACCC found that these concerns were not likely to eventuate because of the "diverse" customer base for tiles in Australia.

"There is little doubt that the proposed acquisition will allow Bunnings to compete strongly with specialist tile retailers, particularly in supplying larger builders who Bunnings has struggled to attract to date," Mr Sims said.

"Stronger competition may pose challenges for some tile retailers, but it is unlikely to lead to a substantial lessening of competition in this market."

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Bunnings entered an agreement to acquire Beaumont Tiles in late April 2021.

The DIY retail giant confirmed that Beaumont Tiles will continue to be run as a "separate and distinct" business to Bunnings stores.

Source: 9News https://www.9news.com.au/national/bunnings-beaumont-tiles-acquisition-given-green-light-by-accc/6a454a8d-ed9a-40c1-9966-4f7582312a3d

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Finance Advice 2021