Bunnings’ takeover of Adelaide Tools investigated by ACCC

The competition watchdog is investigating hardware giant Bunnings’ purchase of Adelaide Tools.

Bunnings boss Mike Schneider. Picture: Peter Mathew

The competition watchdog is investigating hardware giant Bunnings’ acquisition of Adelaide Tools, to assess any potential breach of its provisions.

The Australian Competition and Consumer Commission move follows Bunnings’ deal last month to take over the South Australian business, which has five retail stores and an online business.

Wesfarmers’ Bunnings is the dominant hardware retailer in the country and the ACCC inquiry underlines the sensitivity around any expansion through acquisition after the collapse of Woolworths’ Masters stores three years ago.

The ACCC inquiry is slated to conclude in late January next year.

No price was disclosed for the acquisition, which Bunnings said was part of its strategy to attract more trade customers.

The acquisition is subject to regulatory approval.

READ MORE: Bunnings’ buy targets tradies

Adelaide Tools is a 70-year-old family-owned and operated business serving tradies and high-end DIY enthusiasts at five Adelaide stores. It also has an online business offering more than 8000 products.

“The business will continue to operate as Adelaide Tools and will give Bunnings insight into the dynamics of the trade specialist market,” said Bunnings managing director Mike Schneider.

“While our businesses are very different, we see strong alignment between the Adelaide Tools and Bunnings brands, with both businesses having a strong focus on team, advice and service.

“We believe this acquisition will deliver even more choice and convenience for trade customers.”

Adelaide Tools director Rob Peach said when the acquisition was announced that it was a good outcome for the business, team and customers.

“This shows a vote of confidence in the South Australian retail market and is great recognition for the brand that we have built over the last 70 years,” he said. “We are also pleased that Bunnings intends to continue to run the business as Adelaide Tools.”

Since Wesfarmers demerged Coles late last year, Bunnings has become the major profit driver for the Perth-based conglomerate. For the fiscal 2019 year Bunnings posted an 8.1 per cent rise in full-year pre-tax earnings to $1.626 billion as revenue increased 5 per cent to $13.166 billion.