Comp Comm says no to Pepkor's DIY project

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Comp Comm says no to Pepkor's DIY project

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Published Date: 2021-06-01 | Source: INCE|Community | Author: The Finance Ghost

Comp Comm says no to Pepkor's DIY project

In August 2020, Pepkor announced that it had entered into an agreement with Cashbuild to sell 100% of the shares of The Building Company (TBC) for nearly R1.1bn.

TBC contributed 10% to Pepkor's revenue in FY20 and includes well-known brands like BUCO, Timbercity and Tiletoria.

The Competition Commission has recommended that the transaction be prohibited as it will result in a "substantial prevention or lessening of competition in the market for building materials, hardware and related products in South Africa."

The DIY and building materials market has had an exceptionally good year, as people spent more time at home and invested in home improvement rather than holidays and trips to restaurants during lockdown.

The remote working trend is another great support for DIY, as those able to work from home elected to improve their working environments at home.

This is a blow to Pepkor's plans to focus on its core business of discount and value retail. There won't be any smiles at Cashbuild either, as the company hoped to increase its strength in the market.

It's not over yet - the recommendation will be considered by the Competition Tribunal at a hearing where arguments from all parties will be considered as part of finalising the ruling.





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