Keeping cement prices low was the main reason behind the Commerce Commission banning Fletcher Building’s bid for W. Stevenson & Sons last year. The commission believed by not allowing the bid would allow the target company be sold to another party. That new owner would then be able to use the threat of importing cement to secure a favourable price from either Fletcher or a rival supplier.
Commission chairwoman Paula Rebstock released details of the decision to the Mergers and Acquisitions summit in Auckland this week, saying competition would have been lessened if the deal had been approved. Cement prices would also be kept lower by allowing rivalry to flourish. At stake was the national market for the manufacture, importation and wholesale supply of cement. “These lower prices would then be likely to flow on to other cement users,’’ she said. If Fletcher’s bid was allowed, it would have been a buyer and seller of cement.
A Stevenson spokeswoman said yesterday a sale of the business would be announced within a month. Describing the sale as “a drawn-out process’’, she said it had been delayed by the length of time the commission took to decide on the Fletcher bid. In September last year, the commission declined the bid from subsidiary Fletcher Concrete and Infrastructure which wanted to buy Stevenson’s building products division. Stevenson is the largest independent cement user and Fletcher is a major cement supplier (original report New Zealand Herald).