Nostalgia as merger milestone reached
Sir Patrick Higgins is feeling a little nostalgic over the big changes at the company his father founded in 1951.
Competition watchdog the Commerce Commission has this month cleared Fletcher Building’s acquisition of Palmerston North-based construction firm Higgins Group for just under $315 million.
Higgins said the family was largely leaving comment on the merger to Fletcher, but he had been struck by a feeling of nostalgia as the deal got closer to completion.
‘‘I was there since day one. There’s a lot of emotion, [thinking about] all the staff and good things that’ve happened over the years, but there’s a time for everything.’’
Higgins started out working with the road crews for his father’s company before moving into management.
Much of his family has been involved and the company has a high profile in Manawatu through its sponsorship of the Turbos rugby team and assistance in other causes.
The commission focused on whether the purchase would erode competition in the supply of aggregates in north Waikato, Napier, Manawatu-whanganui, Kapiti and Christchurch.
‘‘In particular, the commission considered whether the loss of Higgins’ quarry operations in these regions would make it easier for Fletcher Building to raise prices to external aggregate customers such as roading contractors,’’ the commission said.
‘‘We consider that strong competition would continue in these regions from existing competitors and the ability of customers to selfsupply,’’ it said.
The approval covers Higgins’ road surfacing and road maintenance, its civil structure and construction products, including most of its aggregates and bitumen businesses.
Palmerston North mayor Grant Smith welcomed the commission’s decision. He said the merger was good news for the whole Manawatu region.
‘‘Fletcher are buying the brand and the Higgins way of doing business, so I expect the community will continue to benefit from their presence.
‘‘And the Higgins family now have 315 million new reasons to reinvest in the Manawatu.’’
Higgins chief executive David Geor said the decision reinforced that Higgins and Fletcher were complementary businesses and he expected the deal would benefit their customers over time.
‘‘Higgins and Fletcher Building people have been working alongside each other to understand the details of combining our businesses. This approval is a fantastic milestone and it means we can really move forward with our transition towards being part of Fletcher Building.’’
A Fletcher spokesperson said the merger remained conditional on approval from the Overseas Investment Office and, because a Higgins-owned Fiji construction company was included, Fijian regulatory authorities.
Higgins has not sold its readymix concrete business and property businesses and Fletcher amended the application on June 17 so that Horokiwi Quarries was no longer part of the merger.
Higgins Group owns a 50 per cent shareholding in Horokiwi Quarries along with equal shareholder Fulton Hogan.
A Higgins spokesperson said the amendment was a commercial decision based on the Commerce Commission’s belief that Fletcher having part ownership in Horokiwi would reduce competition in that market.
Central Amalgamated Workers Union regional representative Gordon Tweeddale said the union had been given no sign the merger would cost any jobs.
Fletcher Building chief executive Graham Darlow previously told the Manawatu Standardworkers would get offers ‘‘no less favourable’’ than their current contracts when Fletcher officially took over.
Higgins Group director Bernard Higgins said the commission’s approval hadn’t changed things for the family. The decision to sell part of the company has already been made. He said Higgins’ ready-mix concrete and property businesses would keep them busy, and they remained committed to Manawatu and remaining staff.