Builders merchant Travis Perkins is offering to sell a number of branches in order to comply with Office of Fair Trading concerns about its proposed take-over of rival merchant group BSS Group.
The Office of Fair Trading has decided that there are competition issues in 20 local areas, specifically where there is overlap between Travis Perkins’ City Plumbing Supplies and BSS Group’s Plumbing Trade Supplies brands.
The OFT is considering the Travis Perkins offer to dispose of the stores, having come to the conclusion that the proposed acquisition “will not give rise to competition concerns at a national level because the merged firm will continue to face strong competition from national and regional plumbing and heating specialist retailers with sizeable market shares”.
The form of the proposed disposal will be the subject of public consultation prior to the OFT deciding whether to accept the undertakings in lieu of reference to the Competition Commission.
Amelia Fletcher, senior director of mergers for the OFT, said: “The OFT, as the first phase authority, applied a cautious approach to assessing the local impact of the proposed merger. We are considering Travis Perkins’s offer of divestments in those local areas where the evidence before us, including the views of many local customers and competitors, did not dispel our concerns about the potential adverse impact of the merger on consumers.”
In assessing the level of competition and overlap, the OFT took account of the constraint provided by branches of other national specialists, the proximity of the parties’ own stores and the degree of competition provided in an area by independent plumbing and heating specialists and other suppliers of plumbing and heating products.