ACCC clears Barro family’s ‘creeping’ stake in Adelaide Brighton

The ACCC has dismissed competition concerns about the Barro family’s 43pc stake in Adelaide Brighton.

The competition regulator says it has found no evidence a stake held by Melbourne’s billionaire Barro family in building products supplier Adelaide Brighton influenced competition between the companies in Melbourne, Brisbane and Townsville.

The Barro Group now owns a 43 per cent chunk of Adelaide Brighton and the probe by the Australian Competition and Consumer Commission examined overlap in the supply of cement, concrete and aggregates.

The ACCC said the investigation has now been closed after it found Barro and Adelaide Brighton will continue to face competition from Boral, Holcim and Hanson, three large vertically integrated competitors with national operations, along with a number of smaller independent competitors.

“On the basis of the information we have available to us, Barro’s stake in Adelaide Brighton will not substantially lessen competition. Major rival cement, aggregates and pre-mixed concrete suppliers will continue to provide competition,” ACCC Commissioner Stephen Ridgeway said.

The ACCC had asked market players how intense the competition between the two companies is and whether there are any barriers in trying to compete with Barro in the market.

The ACCC noted it could reopen its probe if it receives further information that changes its current position.

The regulator said it “closely considered” competition impacts on the pre-mixed concrete and aggregates markets in Melbourne, Brisbane and Townsville, where Barro and Adelaide Brighton’s operations overlap and did not identify any areas of concern.

Adelaide Brighton - chaired by Raymond Barro - said in October when the investigation was launched that there was limited crossover for both products and locations between the two companies, and noted Barro’s 43 per cent stake had been acquired over a 21-year period, with its current holding in place since September 2018.

The Adelaide cement maker opened the door in August under new boss Nick Miller to considering a potential merger with Barro, as weak trading conditions boosted the case for the two suppliers to combine.

Mr Barro assumed the chairman’s role in May while his older sister Rhonda Barro also sits on the cement company’s board.

Amid expectations the downturn in the residential construction market will persist until 2021, Adelaide Brighton chief executive Nick Miller said it needs to consider all options as a business.

The Barro family has been steadily lifting its control over the $2 billion manufacturer via creep provisions, with its majority stake raising talk the Barro Group could either launch a takeover of Adelaide Brighton or Barro itself could be swallowed.

Speculation was further stoked after Mr Barro said there is “merit” in a merger to create a cement giant after Adelaide Brighton’s annual general meeting in May.