Competition Bureau safeguards competition in markets essential to delivery of electricity and internet to Canadians

From: Competition Bureau Canada

August 6, 2020 – GATINEAU, QC – Competition Bureau

Today, the Competition Bureau registered a consent agreement with the Competition Tribunal to address its concerns related to WESCO International Inc.’s $6.1B acquisition of Anixter International Inc., which would have combined the two largest distributors of pole line hardware and data communication (datacom) products in Canada. These products are essential inputs in the delivery of electricity and internet to Canadians and Canadian businesses.

Following a thorough review, the Bureau concluded that this transaction would likely have substantially lessened competition in these markets by eliminating the rivalry between WESCO and Anixter, resulting in higher prices and lower quality of service for a large number of customers, including contractors, utilities, cable companies, and telecommunication service providers.

The combination of the two companies would have resulted in high market shares in various markets across the country. The Bureau found that the remaining competitors in these markets generally could not offer comparable product selection, pricing and service, and that barriers to entry or expansion are high.

To remedy the Bureau’s concerns, the consent agreement requires WESCO to divest its datacom division and its utility division. The remedy includes thousands of customer accounts, inventory, key personnel, branch locations and relationships with key manufacturers.

The Bureau is satisfied that this agreement will address its competition concerns in Canada. The consent agreement will be available on the Competition Tribunal website shortly.

Quotes

“Canadians rely on companies like WESCO and Anixter to support their basic needs, such as light, heat and internet connectivity. We are confident that the agreement signed today will preserve competition in markets vital to the basic needs of Canadians.”

Matthew Boswell

Commissioner of Competition

Quick facts

  • Pole line hardware includes a variety of high/medium voltage equipment installed on electrical transmission/distribution lines, and is purchased by electrical utilities, among other customers. Datacom products include copper, coaxial, and fiber-optic cabling, cabling infrastructure products, and associated equipment used by telecommunications and cable companies, internet service providers, data centres and other customers.

  • WESCO is a leading global distributor of a wide array of products, including pole line hardware and datacom products. WESCO operates from 11 distribution centres and approximately 500 branches, including 120 locations in Canada.

  • Anixter distributes a wide range of products across approximately 50 countries, including through 31 locations in Canada.

  • Mergers of all size and in all sectors of the economy are subject to review by the Bureau to ensure they do not result in a substantial lessening or prevention of competition.

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