SUMMARY OF
RANSOMES PLC AND WESTWOOD ENGINEERING LTD AND LASER LAWNMOWERS
LTD: A REPORT ON THE MERGER SITUATION
On 27 February 1990 the Secretary of
State for Trade and Industry asked the MMC (Appendix 1.1)
to investigate and report on the acquisition of Westwood
Engineering Ltd (Westwood) and Laser Lawnmowers Ltd (Laser)
by RANSOMES plc (Ransomes). This reference to us was
made in the light of the apparently high market share for
domestic ride-on mowers of the merged concern and the possible
effects of the merger on the distribution of other types
of domestic mowers. Westwood and Laser carried on a single
enterprise mainly concerned with the manufacture in the United
Kingdom of domestic ride-on mowers and their sale in the
United Kingdom and elsewhere, principally continental Europe.
Ransomes' main business is the manufacture and distribution
of grass-care machinery in the United Kingdom, North America
and continental Europe. Its subsidiary G D Mountfield
Ltd (Mountfield) manufactures domestic walk-behind mowers
in the United Kingdom which are sold throughout the United
Kingdom and the rest of Europe.
We find that the markets for domestic ride-on
mowers and domestic walk-behind mowers are separate.
In 1989 these markets were worth 24 million and over 100 million
respectively. In the ride-on mower market Westwood was the
largest supplier with a 29 per cent share by value.
Mountfield had a 4 per cent share arising mainly from
sales of ride-on mowers imported from the United States.
By the acquisition of Westwood, Ransomes has become the largest
supplier and has increased its share of the market to 33 per
cent. Ransomes faces competition from a wide range of mainly
international firms. The largest competitor has 25 per
cent of the market and the next four largest suppliers have
appreciable shares amounting in aggregate to 21 per
cent. In these circumstances we do not consider Ransomes'
position in the supply of ride-on mowers to be dominant and
we expect the established strong competition between suppliers
to continue.
Ransomes also has a leading position in
the upper end of the walk-behind mower market, with a 26 per
cent share by value of sales of all petrol-powered walk-behind
mowers, but the merger has not affected market concentration
as Westwood no longer sells such machines.
We considered carefully whether the extension,
resulting from the merger, of Ransomes' range of the more
expensive domestic mowers could put it in a position to exert
undue pressure on the specialist dealers which sell most
of these machines. It would be of concern if Ransomes were
able to use its market position to prevent dealers from selling
competitors' machines. We find that a dealer typically carries
a number of makes of mower as this is what the customer expects
to see. There are plenty of makes to chose from. In the case
of the Ransomes group's dealers, the greater part of their
income from selling mowers comes from selling competitors'
mowers. For these reasons we do not believe that Ransomes
could put undue pressure on its dealers.
In these circumstances we consider that
the merger will not adversely affect competition in either
the ride-on mower or the walk-behind mower markets nor weaken
competition in the distribution of domestic mowers as a whole.
We conclude, therefore, that the merger
should not be disturbed.
Back To The Top
Last Revised: June 1999
|
