Fulton Hogan deal under investigation

AUCKLAND: The Commerce Commission has opened an investigation to determine whether Fulton Hogan’s proposed acquisition of Stevenson Group’s construction materials business will lessen competition in any relevant market.

Christchurchbased Fulton Hogan last month agreed to buy the business in a deal under which Fulton Hogan would take full ownership of Stevenson’s quarries and concrete plants, transport, laboratory services and associated plant and equipment. The two companies said the terms of the deal were confidential and it was expected to be settled by July 31.

At the time, neither company anticipated needing the commission’s approval and yesterday the regulator said they had not applied for clearance.

According to the commission, if firms do not apply for clearance it can initiate an investigation under the Commerce Act. If a person is found to have beached the Act, they may be subject to a penalty of up to $500,000 for an individual or $5 million for a firm.

The initial focus of the investigation will be on potential competitive effects of the proposed acquisition on quarry markets in Auckland and North Waikato. It would also consider whether competitive effects arise from Fulton Hogan’s proposed acquisition of Stevenson’s concrete business, the commission said.

When the deal was announced, Fulton Hogan chief executive Cos Bruyn said the acquisition complemented the firm’s vertical supply chain and gave it a longterm supply of quality aggregates to meet growing demand. — BusinessDesk