ACCC clears Wesfarmers takeover of Pacific Brands workwear
The competition regulator has allowed Wesfarmers' takeover of Pacific Brands workwear division, which includes Hard Yakka, King Gee and Stubbies.
The $180 million deal was announced on August 26, and the Australian Competition and Consumer Commission's (ACCC) green light comes the same week as Pacific Brands announced the sale of many of its iconic shoe labels.
The ACCC said a key factor in allowing the sale was the reduced pull of the iconic Hard Yakka and King Gee brands.
"Industry feedback suggests that brand loyalty has diminished over recent years as customers become more focused on quality, price and service," said the commission's chairman Rod Sims.
The ACCC found that this lack of loyalty makes it unlikely that Wesfarmers would be able to restrict the sale of these brands to retail outlets it owns, such as Bunnings and Kmart.
It also found that competition in the workwear sector has increased.
"Wesfarmers will continue to be constrained by a number of existing suppliers and by actual and potential imports from Asia. In retail markets, Wesfarmers will face competition from other retail chains and local outlets for the supply of workwear," Mr Sims said.
"New wholesalers and resellers have entered the market in recent years and the ACCC expects that this trend will continue."
Wesfarmers managing director Richard Goyder welcomed the decision.
"Finalisation of this review has cleared the way for the completion of the transaction which is expected at the beginning of next month," he said in a statement.