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Customers had no concerns over HRP merger

HRP-logoUK: Customers are said to have no concerns over the acquisition of HRP by Beijer Ref due to continued product availability from a number of other major wholesalers.

The published findings of the UK Competition and Markets Authority (CMA) investigation into the acquisition by Beijer Ref, which already owns UK wholesalers Dean & Wood and RW, was published yesterday.

Beijer Ref’s acquisition of HRP, first announced in November last year, was put on hold after the CMA announced it was to investigate the deal in February. The takeover was finally cleared last month, with the CMA finding no evidence that the merger would result in a significant lessening of competition within the UK.

During its investigation the CMA contacted customers and competitors of Beijer Ref and HRP. Most customers who responded to the CMA’s investigation are said to have had no concerns regarding the merger. Seven of the 13 competitors who responded and a supplier noted that the merger would increase the buying power of the merged firm, increasing their ability to compete for customers.

While the addition of HRP does make Beijer Ref the largest UK wholesaler of refrigeration components and air conditioning products by revenue, Climate Center and FSW still dominate sales of refrigeration systems. Also, Climate Center remains the largest wholesaler in terms of its branch network with 45 locations. Beijer Ref’s total combined companies – Dean & Wood, RW and HRP – have 41.

Beijer submitted a list of what it considered to be credible competitor companies which it estimated had a turnover greater than £10m. The list comprised Climate Center, FSW, Kooltech, Smith Brothers Stores, Brymec, Thermofrost Cryo, RSL, AMP, Hawco and Space Air.

However, the CMA considered it appropriate to include in its investigation only those companies that competed with Beijer Ref and HRP for trade counter sales. The refined list of effective competitors comprised Climate Center, Kooltech, Thermofrost Cryo, Smith Brothers Stores, and FSW. Although Smith Brothers Stores currently has a low market share in refrigeration, the CMA considered it an effective competitor to Beijer Ref given that it has a relatively large network of 12 branches and has opened two new branches already in 2016.

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