Fulton Hogan allayed competition concerns surrounding its purchase of Stevenson Group’s construction materials business by leaving the Huntly quarry out of the acquisition.
The Commerce Commission opened an investigation into the deal in June after the two companies announced the transaction without applying for regulatory clearance. The commission was concerned the acquisition could concentrate too much of the aggregates supply and production in Auckland and North Waikato because Fulton Hogan already owned quarries in those areas.
The regulator was satisfied that Fulton Hogan’s purchase of the Drury quarry was fine because rivals in Auckland had excess capacity and the ability to expand their own production in response. It thought the Huntly quarry was a problem and would raise substantial competition concerns, however, Fulton Hogan said it wouldn’t buy that site prompting the regulator to close its investigation.
“The decision to remove the Huntly quarry from the transaction addresses our concerns in this case,” deputy chair Sue Begg said. “We are satisfied that Fulton Hogan’s purchase of Stevenson’s Auckland quarry assets is unlikely to substantially lessen competition given the presence of other competitors in this market and we have now closed our investigation.”
When the deal was announced Fulton Hogan chief executive Cos Bruyn said the acquisition complements the firm’s vertical supply chain and gave it a long-term supply of quality aggregates to meet growing demand in Auckland and Waikato. Stevenson CEO Mark Franklin said at the time the Drury quarry had been part of the group since 1939 but was probably more valuable in another company’s supply chain.