Petstock may be required to divest several of its recently acquired pet retail businesses due to significant competition concerns raised with the Australian Competition and Consumer Commission (ACCC) amid Woolworths’ proposed acquisition of a 55 per cent stake in the company.
New Zealand’s competition regulator, the Commerce Commission, has already cleared Woolworths’ acquisition on this side of the Tasman.
Petstock, Australia’s second-largest specialty pet retailer, acquired Best Friends Pets, Pet City, Animal Tuckerbox, and Pet and Aquarium Warehouse in Eltham, Victoria between 2017 and 2022, deals which the ACCC was not informed about.
“Our investigation so far has identified significant concerns with these four transactions in particular because of their impact on national and state-wide chain-on-chain competition, as well as competition in multiple local areas,” said ACCC commissioner Stephen Ridgeway.
“While there is currently no mandatory requirement for merger parties to notify the ACCC, the decision taken here to proceed with acquisitions of this scale without seeking ACCC clearance demonstrates the limitations of the current informal merger regime in Australia.”
Petstock has offered to divest 41 specialty pet retail stores, 25 co-located veterinary hospitals, four brands and two online retail stores across the Best Friends Pets, Our Vet, My Pet Warehouse, Pet City, and Animal Tuckerbox brands, as well as the Pet and Aquarium Warehouse in Eltham, Victoria.
According to the ACCC, it can seek court-ordered divestiture of shares or assets acquired in violation of the merger law for a period of three years after the completion of a transaction, and can also seek penalty orders for a period of six years.
The ACCC has opened a public consultation on the matter.
Meanwhile, Woolworths said that it remains focused on working with Petstock to pursue its proposed acquisition. The company said it acknowledges the public consultation process and will engage with the ACCC to ensure the parties secure relevant regulatory approvals to complete the transaction.
Woolworths received approval from the New Zealand Commerce Commission for the proposed acquisition of Petstock’s assets across the Tasman in April.