Canada’s Watchdog Tackles $6.1B Data Deal

The Competition Bureau registered a consent agreement with the Competition Tribunal to address its concerns related to WESCO International’s $6.1B acquisition of Anixter International Inc., which would have combined the two largest distributors of pole line hardware and data communication (datacom) products in Canada. These products are essential inputs in the delivery of electricity and internet to Canadians and Canadian businesses.

Following a thorough review, the Bureau concluded that this transaction would likely have substantially lessen competition in these markets by eliminating the rivalry between WESCO and Anixter, resulting in higher prices and lower quality of service for a large number of customers, including contractors, utilities, cable companies, and telecommunication service providers.

The combination of the two companies would have resulted in high market shares in various markets across the country. The Bureau found that the remaining competitors in these markets generally could not offer comparable product selection, pricing and service, and that barriers to entry or expansion are high.

To remedy the Bureau’s concerns, the consent agreement requires WESCO to divest its datacom division and its utility division. The remedy includes thousands of customer accounts, inventory, key personnel, branch locations and relationships with key manufacturers.

Full Content: Canada

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