The Australian Competition and Consumer Commission (ACCC) has opposed the proposed acquisition of Wattyl by South Africa's Barloworld, ACCC chairman, Graeme Samuel, said. "The ACCC has formed the view, after a comprehensive investigation and inquiries among industry participants, that the proposed acquisition is likely to substantially lessen competition for the manufacture and supply of architectural and decorative paints in Australia," Samuel pointed out. "Wattyl and Barloworld are the second and third largest suppliers of architectural and decorative paints in Australia, and the merged firm would account for more than half of total sales. The merged firm and Orica, which is currently the largest supplier, would together account for approximately 90% of architectural and decorative paint sales."
Commenting on the announcement in a statement made to the press, Barloworld CEO Tony Phillips said the ACCC's position was "disappointing."
"We believe that our proposal would have been good for the Australian public and the industry. It would have revitalized consumer choice by creating a vigorous competitor to the current market leader and also stimulated market growth. We believe that the divestment proposals we presented to the ACCC would have addressed their competition concerns.
"However, they now want us to go further and divest even more assets. This would have destroyed the business logic of the deal. Accordingly, given that ACCC approval was a condition and taking into account the commercial considerations, we will be letting our offer lapse on July 20."