The OFT's merger investigation found that the main overlap between the parties was in their specialist plumbing and heating supply subsidiaries, Travis Perkins's City Plumbing Supplies and BSS's Plumbing Trade Supplies stores.
It concluded that the proposed acquisition would not give rise to competition concerns at a national level because the merged firm will continue to face strong competition from national and regional plumbing and heating specialist retailers with sizeable market shares.
The OFT assessed the level of competition that would remain in local areas where the parties have overlapping stores. To do this, it took account of the constraint provided by branches of other national specialists, the proximity of the parties' own stores, and the degree of competition provided in an area by independent plumbing and heating specialists and other suppliers of plumbing and heating products.
Following this local analysis, the OFT was able to conclude that competition concerns would not arise in the majority of local areas where Travis Perkins's City Plumbing Supplies and BSS's Plumbing Trade Supplies stores overlapped.
However, Travis Perkins has offered to sell the Plumbing Trade Supplies store or the overlapping City Plumbing Supplies stores in 20 areas across the UK where the OFT identified local competition concerns. The form of the proposed divestment undertakings in these 20 local areas will be the subject of public consultation prior to the OFT deciding whether to accept the undertakings in lieu of reference to the Competition Commission.
Amelia Fletcher, senior director of mergers for the OFT, said: “The OFT, as the first phase authority, applied a cautious approach to assessing the local impact of the proposed merger. We are considering Travis Perkins's offer of divestments in those local areas where the evidence before us, including the views of many local customers and competitors, did not dispel our concerns about the potential adverse impact of the merger on consumers.”
Travis Perkins and BSS issued a statement in response saying: “Travis Perkins believes that these branches will be of interest to a number of eligible buyers and that their sale will not materially impact the strategic and financial attractiveness of the overall transaction.”