Platinum Equity owns Winc. Winc is what Staples is now called in Australia. Staples took over Corporate Express earlier this decade.
The proposed takeover strengthens Winc against its competitors, which include hundreds of small business retailers in the stationery space.
The ACCC announced yesterday that it will not oppose the takeover.
The ACCC will not oppose the proposed acquisition of OfficeMax Australia (OfficeMax) by Platinum Equity.
Platinum Equity owns Winc (formerly Staples Australia). Winc and OfficeMax both supply office products to commercial and government customers in Australia.
“Following extensive market inquiries and analysis of documents and data, the ACCC has decided not to oppose this transaction. The ACCC believes the transaction will lessen competition but doesn’t reach the threshold of causing a substantial lessening of competition,” ACCC Chairman Rod Sims said.
“Any deal that sees the largest supplier acquiring the second largest in a market will require very close scrutiny. However, in a finely balanced decision the ACCC found that a combined Winc-OfficeMax would continue to face competition from the remaining key suppliers, Complete Office Supplies (COS) and Lyreco.”
The consolidation we are seeing in Australia in the stationery and office products space follows similar consolidation in the US in the office products space.
This Platinum Equity takeover of OfficeMax challenges newsagents to address undercapitalisation, inefficiencies and uncompetitiveness in its older stationery wholesale businesses such as GNS nationally and Ancol in South Australia.
GNS has already moved in part through the goal of broadening its shareholder base. But that move is not enough.
In my opinion, the proposed move by GNS is too small, and probably too late. Given the inaction by the GNS board on structural matters for the last ten years or so, more bold action is needed to catch up and facilitate greater competitiveness for newsagents.
To confront the challenge of a bigger Winc and to provide newsagents with better buying, GNS needs to tap into something much bigger than its small business owned Australia only operation.
I think Ancol should have closed years ago. The South Australian marketplace is too small for it to supply newsagents on competitive terms.
If Winc moves into retail, as some who watch the space think it will, the competitive challenge to newsagents will be greater as it will be on show, for us to see.
What many do not see today is the reach by Winc online for stationery for small business and even home use. Theirs is an extraordinary business, leverage excellent early work by Corporate Express and building on that in recent years to provide fast delivery oil office products at competitive prices. This is what has hurt newsagency stationery sales the most. This is where GNS is most challenged.