Commission Clears Overlap In Roofing Tiles

Credit: Original article can be found here

The Commerce Commission has granted clearance to IKO
Industries Limited to acquire all of the shares of Ross Roof
Group Limited.

IKO and Ross Roof both supply steel
roof tiles that are predominantly used on residential houses
and are better known in New Zealand by their respective
brands, Gerard and Metrotile.

Chair Anna Rawlings said
that the Commission is satisfied that the acquisition is
unlikely to substantially lessen competition in any New
Zealand market.

“Our investigation found that steel
tiles compete with other types of roofing, and in particular
long run steel roofing, which is used in the majority of
residential roofing projects in New Zealand,” Ms Rawlings
said.

“While IKO and Ross Roof are the two main
suppliers of steel roof tiles in New Zealand, competition
from long-run steel roofing suppliers such as Dimond,
Metalcraft, Roofing Industries and Steel & Tube, and
from smaller suppliers of steel roof tiles, is likely to
constrain the ability of the merged entity to raise prices,
reduce service quality or coordinate their
behaviour.”

A public version of the written reasons
for the decision will be available on the Commission’s case
register
in the near
future.

Background
IKO is a global
roofing company, headquartered in Canada. In New Zealand,
IKO cuts and presses steel roof tiles through its local
subsidiary Roof Tile Group Limited (trading as Gerard) and
sells these tiles within New Zealand and
overseas.

Ross Roof is a New Zealand owned and
operated roofing company. It cuts and presses steel roof
tiles, and then sells these tiles within New Zealand and
overseas. Within New Zealand, Ross Roof supplies roof tiles
under the Metrotile brand.

We will give clearance to a
proposed merger if we are satisfied that the merger is
unlikely to have the effect of substantially lessening
competition in a market.

Further information
explaining how the Commission assesses a merger application
is available on our website.

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