The Competition Bureau has resolved competition concerns over a proposed merger in the housing construction market by requiring the sale of a truss manufacturing facility to maintain competitive options in the Saskatoon area.
The bureau reached a consent agreement with RONA Inc. to address competition concerns arising from its proposed acquisition of All-Fab Building Components. RONA and All-Fab are established participants in the lumber and building materials industry. RONA operates under banners such as RONA, Dick's Lumber, and ZyTech, while All-Fab runs businesses including Nu-Fab, Alliance Truss, Pacific Truss, and Littfin Truss.
The two companies are involved in designing, manufacturing, and supplying roof and floor trusses. A roof truss is a wooden structure that provides support and strength to a roof, while floor trusses are wooden structures that support the floor. Both roof and floor trusses are key components used to build new homes.
Following a thorough review, the bureau determined that the merger could significantly reduce competition in the Saskatoon area, particularly in the design, supply, and manufacturing of roof and floor trusses used in housing construction. The bureau noted that the lumber and building materials market is expanding due to Canada's ongoing growth in housing. The bureau found that the merger would likely lead to higher prices and fewer consumer options by eliminating rivalry between RONA and All-Fab.
To resolve these concerns, RONA has agreed to sell its truss manufacturing facility in Martensville, Saskatchewan, to an independent buyer approved by the Commissioner of Competition. This divestiture is intended to maintain competition in the region and ensure that local builders and contractors continue to have competitive choices for truss products.
In a press release, the bureau expressed confidence that the Martensville facility sale will address the merger's potential anti-competitive effects. The consent agreement is as enforceable as a court order once registered with the Competition Tribunal.