Woolworths Group has been granted clearance by New Zealand’s Commerce Commission to acquire a majority stake in PETstock.
Last year, Woolworths sold five per cent of its stake in Endeavour Group to free up capital to make a $586 million investment for 55 per cent of the family founded business.
The purchase agreement will see Woolworths acquire 55 per cent of the shares in PETstock with the founders, Shane and David Young, and other existing PETstock shareholders retaining a 45 per cent equity.
PETstock’s New Zealand operations include 15 physical PETstock stores, and websites PETstock.co.nz, pet.co.nz, and petpost.co.nz.
Through these channels, it sells a range of pet products including pet food, cat litter, pet accessories and pet health products. It also provides advice and related services such as dog grooming, water testing, pet training and veterinary services.
In granting clearing for the acquisition, the Commerce Commission’s Chair Dr John Small said that the deal was unlikely to lessen competition in New Zealand’s pet care industry.
“Our investigation found that Woolworths and PETstock do not compete closely in the retail supply of pet products and will continue to be constrained by several other established competitors in all relevant local areas, including online retailers. We consider that these factors will mean the merged entity is unlikely to be able to significantly increase prices, or reduce quality, including by combining its Woolworths and PETstock stores to offer bundled discounts to consumers in ways that substantially lessen competition in any market,” said Dr Small.
“In relation to the acquisition of pet products, our investigation found that the merged entity is unlikely to have the incentive and ability to engage in anticompetitive conduct which may affect suppliers or competitors.”
To stay up to date on the latest industry headlines, sign up to the Pet Industry News e-newsletter.