ACCC won’t oppose Wesfarmers, Catch tie-up
Wesfarmers is one step closer to acquiring online retail company Catch, after the Australian Competition & Consumer Commission (ACCC) announced on Monday it would not oppose the tie-up.
The acquisition is expected to occur in August, provided no material changes occur in the business through to completion. Landlord consent, which was another remaining completion obligation according to Wesfarmers, has been received.
Wesfarmers first announced its plan to acquire Catch in June, saying the e-commerce company presented an opportunity to accelerate the digital and e-commerce capabilities in its Kmart and Target businesses.
The acquisition was subject to approval by the ACCC, which reviewed the effect of the deal on competition in the physical and online retail sector, including for third-party marketplace sellers.
The watchdog ultimately found the acquisition was not likely to substantially lessen competition due to the fact that Wesfarmers and Catch are not close competitors and have separate business models, and the proliferation of online marketplace providers, such as Kogan and Amazon.
“The current growth in online marketplaces is fostering competition between providers, and feedback indicated that Wesfarmers’ proposed acquisition of Catch would be unlikely to change that level of competition,” ACCC commissioner Stephen Ridgeway said in a statement.
“Stakeholders also consistently told us that Catch and Wesfarmers are not close competitors, primarily due to the differences in their business models.”
While Wesfarmers, through its Kmart and Target stores, and Catch both retail a variety of products to consumers, ranging from clothing and general merchandise to homewares and electronics, Catch is an online-only retailer that offers out-of-season, clearance and overrun branded products, while Target and Kmart are predominantly bricks-and-mortar stores.
The ACCC also noted that a combined Wesfarmers-Catch marketplace will not reduce options for third-party sellers, as Wesfarmers will be a new entrant in that space and will be competing with other online marketplaces.
“I am pleased to receive the news that Wesfarmers has been given the tick of approval for the acquisition of Catch from the Australian Competition and Consumer Commission. This takes us one step closer to joining Kmart Group,” Nati Harpaz, Catch Group CEO, told Inside Retail.
“The acquisition is expected to be finalised over the coming weeks but for now, it’s business as usual.”
Nati Harpaz is an owner of Octomedia, Inside Retail’s parent company.
This story was first published on sister site, Inside Retail Australia.