Commission clears overlap in roofing tiles

The Commerce Commission has granted clearance to IKO Industries Limited to acquire all of the shares of Ross Roof Group Limited.

IKO and Ross Roof both supply steel roof tiles that are predominantly used on residential houses and are better known in New Zealand by their respective brands, Gerard and Metrotile.

Chair Anna Rawlings said that the Commission is satisfied that the acquisition is unlikely to substantially lessen competition in any New Zealand market.

“Our investigation found that steel tiles compete with other types of roofing, and in particular long run steel roofing, which is used in the majority of residential roofing projects in New Zealand,” Ms Rawlings said.

“While IKO and Ross Roof are the two main suppliers of steel roof tiles in New Zealand, competition from long-run steel roofing suppliers such as Dimond, Metalcraft, Roofing Industries and Steel & Tube, and from smaller suppliers of steel roof tiles, is likely to constrain the ability of the merged entity to raise prices, reduce service quality or coordinate their behaviour.”

A public version of the written reasons for the decision will be available on the Commission’s case register in the near future.

Background

IKO is a global roofing company, headquartered in Canada. In New Zealand, IKO cuts and presses steel roof tiles through its local subsidiary Roof Tile Group Limited (trading as Gerard) and sells these tiles within New Zealand and overseas.

Ross Roof is a New Zealand owned and operated roofing company. It cuts and presses steel roof tiles, and then sells these tiles within New Zealand and overseas. Within New Zealand, Ross Roof supplies roof tiles under the Metrotile brand.

We will give clearance to a proposed merger if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.

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