Commission grants clearance to Beijer Ref to acquire Refspecs

In reaching its decision, the Commission considered the potential impact of the proposed acquisition on competition in multiple markets including markets for the wholesale supply of refrigeration and air-conditioning equipment and componentry, and hydrofluorocarbon (HFC) refrigerants.

The Commission had earlier raised initial concerns about the acquisition, but after further investigation, Committee Convenor Dr Derek Johnston said that the Commission was satisfied that the acquisition is unlikely to substantially lessen competition in any New Zealand market.

“Our investigation indicated that, while Beijer Ref and Refspecs would otherwise continue to compete in each of the relevant markets, the merged entity will face material competitive constraint from other existing wholesalers. The focus of our investigation was on the supply of HFC refrigerants because the merging parties currently hold a large proportion of the permits that enable suppliers to import HFC Refrigerants into New Zealand. However, industry regulation is forcing end-users to move away from these gases and in the meantime, there will still be other suppliers with the necessary permits to compete with the merged entity to supply HFC refrigerants.”

A public version of the written reasons for the decision will be available on the case register in due course.

Background

HFC refrigerants are a group of synthetic gases that can be used in both air-conditioning and refrigeration systems. HFC refrigerants are manufactured overseas and, with the appropriate permits, can be imported into New Zealand for use primarily within the refrigeration and air-conditioning industries.

We will only give clearance to a proposed merger if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.

Further information explaining how the Commission assesses a merger application is available for reference.