Commerce Commission grants Comfort Group clearance to acquire Dunlop Living

The Commerce Commission has granted clearance for New Zealand Comfort Group Limited to acquire all of the business assets of Dunlop Living Limited. The clearance is given subject to the merged entity selling the foam underlay manufacturing business currently owned by Dunlop Living.

Commerce Commission Deputy Chair Sue Begg said the Commission was satisfied that the proposed acquisition would not have the effect, or likely effect, of substantially lessening competition in the national markets for the manufacture and supply of box bedding, polyurethane foam and foam underlay.

Although the merger would give rise to a significant increase in market share for polyurethane foam underlay, the Commission considers that the sale of Dunlop Living’s foam underlay business to an independent party will be sufficient to remedy the loss of competition in that market.

In the box bedding market, the Commission considers the merged entity is likely to be constrained by a combination of existing competition, the ability of these existing competitors to easily expand, and the ability of large customers to switch to another supplier.

In the polyurethane foam market, the Commission considers the merged entity is likely to be constrained by existing competition. In addition, the Commission considers that Comfort Group is unlikely to be a significant competitor with, or without, the acquisition.

A public version of the written reasons for the decision will be available soon on the Commission’s website: www.comcom.govt.nz/clearances-register

Background
New Zealand Comfort Group manufactures and supplies beds and carpet underlay. New Zealand Comfort Group also manufactures foam, which it mostly uses in its Sleepyhead branded beds.
Dunlop Living manufactures and supplies beds, carpet underlay and furniture. Dunlop Living also manufactures foam for use in its beds and furniture manufacturing business and supplies foam to competing bed and furniture manufacturers.