Beijer Ref’s bid to purchase Auckland-based wholesaler Realcold is currently before New Zealand’s Commerce Commission which will decide whether the buy-out would result in a substantial lessening of competition. The application to the Commission was made by B100 Ltd, a newly incorporated subsidiary of Bejer Ref.
Today, the Commerce Commission published its statement of preliminary issues, outlining the key competition issues that the Commission considers will be important in deciding whether or not to grant clearance for the Realcold purchase. As expected, these revolve around Beijer Ref’s purchase earlier this year of another New Zealand wholesaler Patton.
Like Patton, the Commission notes that Realcold also assembles and distributes commercial refrigeration and air conditioning equipment in New Zealand.
“As such, the businesses of Realcold and Patton potentially overlap in a number of areas, including the importation and wholesale supply of refrigerants, refrigeration components, and refrigeration equipment,” it says.
Beijer Ref argues that if the merger was to go ahead the combined entity would continue to face strong competition from competitors in both the refrigerant and refrigeration equipment and component supply markets. It names BOC and Nuplex Specialities as competitors in the refrigerants market, Heatcraft New Zealand in the refrigeration equipment and refrigeration components market, BDT and Fujitsu in air conditioning units and Hollyoakes and Smooth-Air in air conditioning components.
The Swedish wholesaler says that Realcold’s broad product portfolio (with brands such as Mitsubishi Heavy Industries, Tecumseh, Emerson Copeland and Gree) would be complemented with Beijer Ref AB’s product programme. The acquisition would also contribute Beijer Ref AB’s European refrigeration-technology expertise, and new eco-friendly refrigeration technology, in New Zealand and Australia.
The Commission is expected to reach a decision by October 7.