ACCC approves new Covs Parts deal


GPC will take over most of the Covs Parts stores under new deal with AHG

ACCC approves new Covs Parts deal
ACCC allows 21 Covs Parts stores to join GPC.

 

The Australian Competition and Consumer Commission (ACCC) will allow GPC Asia Pacific to acquire the majority of Covs Parts stores from Automotive Holdings Group (AHG) after the parties agreed to alter the deal.

Under the new deal, 21 of the 25 Covs Parts stores will transition to GPC ownership, but those in Karratha, Port Headland, Esperance, and Albany will be excluded from the transaction.

The issue with the original proposal, which would have seen GPC add all stores to its portfolio, was company’s presence in Western Australia, where all the Covs Parts stores are situated.

A distributor and retailer of automotive parts through its Repco and Ashdown-Ingram brands, GPC currently has 37 Repco and eight Ashdown-Ingram stores in the state, the same market that Covs Parts operates in.

Rejecting the original proposal in December because it would "likely substantially lessen competition in several regional locations," ACCC chairman Rod Sims has been satisfied with the new solution found by the two companies.

Under the changes, the affected regions "will continue to have two generalist auto parts suppliers, providing more choice for regional trade businesses," Sim says.

"The ACCC’s competition concerns related to specific regional markets.

"Taking into account the undertaking, the ACCC is satisfied that excluding the retained stores from the proposed acquisition sufficiently addresses our concerns."

AHG will continue to operate the four stores under its AMCAP division, retaining current staff and similar stock levels.

 

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