Affected market: Garden Centres
The OFT’s decision on reference under section 33(1) given on 16 May 2006. Full text of decision published 25 May 2006.
West Coast Capital (Hortis) Limited (WCC) is a private equity
partnership which, through its subsidiary TBH Trading Limited (TBH) is
active in the retailing of clothing and footwear.
Wyevale Garden Centres plc (Wyevale) operates a chain of garden centres across England and Wales. The UK turnover of Wyevale Garden Centres plc was £192.5 million for the financial year ended 2004.
WCC is proposing to acquire the entire issued share capital of Wyevale. The parties notified the transaction on 21 April 2006 by way of a Merger Notice and therefore a statutory deadline, which has not been extended, of 22 May 2006 applies.
As a result of this transaction Wyevale and WCC will cease to be distinct. The UK turnover of Wyevale exceeds £70 million, so the turnover test in section 23(1)(b) of the Enterprise Act 2002 (the Act) is satisfied. The OFT therefore believes that it is the case that arrangements are in progress which, if carried into effect, will result in the creation of a relevant merger situation.
WCC, via its trading arm TBH Trading Limited, is involved in the retail of clothing and footwear through 'Qube', 'Office', 'AJT Footwear' and 'USC' retail outlets. Wyevale is active in the garden retail sector. There is limited overlap between the parties’ activities as Wyevale does sell a small amount of garden clothing and footwear. However, it has not been necessary to conclude on the frame of reference in this case as no competition concerns are considered to arise on any definition.
The parties have submitted that Wyevale’s retail of clothing and footwear accounts for less than 1 per cent of its total turnover. In addition, the types of clothing and footwear supplied by the parties would appear to be significantly different. Therefore, the parties are not considered to be close competitors, nor would they be expected to exert a strong competitive restraint on one another.
The merger does not give rise to any vertical issues and none of the third parties contacted raised any competition concerns.
Consequently, the OFT does not believe that it is or may be the case that the merger may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.
This merger will therefore not be referred to the Competition Commission under section 33(1) of the Act.