Watchdog seeks submissions on Fletcher Building’s purchase of Higgins

Fletcher Building will pay $315 million for Higgins Group subject to regulatory clearances.
WARWICK SMITH/FAIRFAX NZ

Fletcher Building will pay $315 million for Higgins Group subject to regulatory clearances.

The Commerce Commission is seeking submissions on Fletcher Building's planned purchase of construction firm Higgins Group.

The commission received an application from Fletcher Building seeking clearance to acquire Higgins, including 50 per cent of shares in Horokiwi Quarries, near Wellington

The Higgins deal was announced in February and is expected to be completed about June 30 subject to commission and Overseas Investment Office approvals.

Fletcher will pay $315 million for Higgins, including a Fiji contracting business.

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Higgins owns a 50 per cent shareholding in Horokiwi Quarries along with equal shareholder Fulton Hogan.

Higgins has more than 1200 staff, and is the third largest player in the road construction and maintenance sector.

Fletcher is the country's biggest construction firm. It reported a profit after tax of $172 million for the six months to December 31, up 51 per cent on the same previous period.

Fletcher has embarked on a flurry of acquisitions and divestments recently, and announced a joint venture with aluminium firm Nalco.

The commission will give clearance for the Higgins deal only if it is satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.

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On Monday the commission published a statement of preliminary issues for the take over, asking for submissions from parties who consider that they have information relevant to the commission's consideration of the matter.

The statement of preliminary issues outlines the key competition issues that the commission currently considers will be important in deciding whether or not to grant clearance.

Submissions close on March 14, with a decision expected on May 3.

 - Stuff

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