The Competition Authority has cleared the way for building supplies group Grafton's acquisition of rival Heiton having determined that the deal would not substantially lessen competition in the provision of retail DIY and builders merchanting services.
The authority has attached two conditions to the purchase.
For the next three years Grafton must inform the competition authority of any proposed mergers or acquisitions it is party to in the builders' merchants sector. The deal must also be concluded in the next twelve months.
"These companies operate in important sectors of the economy where any significant reduction in competition could damage individual consumers, construction businesses and related trades," said Mr Ted Henneberry, Director of the Mergers Division in The Competition Authority.
"We have reached our decision after several months of intensive investigation.
"One of the critical factors is that entry and expansion of rivals has already had a significant pro-competitive effect in this industry. Our investigation demonstrated that there will be continued entry and expansion throughout the country."
Subsequently the board of Grafton has announced that the offer for Heitons has been declared unconditional.
"Heiton Group is an excellent strategic fit with Grafton's Irish and UK operations," said Mr Michael Chadwick, Chairman of Grafton Group said.
"We see opportunities for scale benefits from two geographically complementary businesses, for enhancing our product range and for serving customers."
"We intend to build on the respective strengths of both companies and plan to retain the identity of the trading operations in an integrated national network."
"The acquisition will create an Irish builders merchants and DIY group of scale with the ability to compete against major operators in both Irish and international markets."
The majority of Heiton shareholders have now accepted the offer. By 3.00 p.m. yesterday valid acceptances had been received in respect of 46,124,451 Heiton ordinary shares, representing 92.12 per cent of the existing issued ordinary share capital of Heiton.