Commission Clears Home Ventilation Systems Merger

The Commerce Commission has granted clearance for Volution Group plc to acquire 100% of the business and assets of Proven Systems Limited.

Volution and Proven both supply home ventilation systems. Volution primarily supplies home ventilation systems in New Zealand under the Smart Vent brand, and through wholesalers and building supplies merchants. Proven supplies home ventilation systems under the DVS brand, which it sells direct to consumers.

In reaching its decision, the Commission considered the potential impact of the proposed merger on competition in the market for the manufacture and distribution of home ventilation systems. Within this market, there are different types of ventilation systems such as positive pressure systems, and heat and/or energy recovery systems. The Commission’s market enquiries revealed that the number of positive pressure systems installed is likely to decrease in the future, as the installation of heat and/or energy recovery systems become more prominent.

Associate Commissioner Sue Begg said the Commission was satisfied that the merger is unlikely to substantially lessen competition in any New Zealand market.

“Volution and Proven are two of the larger suppliers of home ventilation systems, and in particular positive pressure systems. However, our enquiries revealed that the merged entity will face significant competition from other suppliers of home ventilation systems such as HRV, SAYR, Fantech and Mitsubishi Electric. HRV, in particular, is a major supplier of positive pressure systems.”

“We are also satisfied that the merged entity would not have the ability and incentive to foreclose rival home ventilation suppliers from accessing distribution channels, or independent home installers from accessing home ventilation systems.”

A public version of the written reasons for the decision will be available on the Commission’s case register in due course.

Background

We will give clearance to a proposed merger if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.
Further information explaining how the Commission assesses a merger application is available on our website.

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