The Australian Competition and Consumer Commission (ACCC) says it will not oppose Winc parent company Platinum Equity’s proposed acquisition of OfficeMax Australia.
The announcement follows the regulator saying it would not oppose to a proposed acquisition of OfficeMax by another rival, Complete Office Solutions (COS), earlier this month.
“Following extensive market inquiries and analysis of documents and data, the ACCC has decided not to oppose this transaction,” ACCC chairman Rod Sims said.
“The ACCC believes the transaction will lessen competition but doesn’t reach the threshold of causing a substantial lessening of competition.”
In August, the regulator raised concerns on the proposed merger between Staples, now known as Winc, and OfficeMax, citing the move could reduce competition and lead to higher prices and lower service levels.
“Any deal that sees the largest supplier acquiring the second largest in a market will require very close scrutiny,” Sims said of the most recent proposal.
“However, in a finely balanced decision the ACCC found that a combined Winc-OfficeMax would continue to face competition from the remaining key suppliers, Complete Office Supplies (COS) and Lyreco.”
He said that COS and Lyreco had been successful in winning large commercial and government customers away from Winc and OfficeMax, so both are likely to provide a “sufficient competitive constraint” on the combined Winc-OfficeMax.
“The ACCC would also expect that if prices and returns increased through an exercise of market power by a combined Winc-OfficeMax, it is likely that other existing suppliers of office products would seek to grow their market share,” Sims said.