ACCC launches review of Woolworths’ PFD acquisition

Sarah Thompson, Anthony Macdonald and Tim Boyd

Sep 23, 2020

AFR

Woolworths chief Brad Banducci’s landmark acquisition of a $552 million stake in family owned PFD Food Services has attracted the attention of the competition regulator.

Woolworths CEO Brad Banducci’s landmark transaction of a stake in PFD Food Services is being reviewed by the ACCC.  Dominic Lorrimer

The Australian Competition and Consumer Commission formally launched a review into the transaction – which would see Woolworths take a 65 per cent stake in PFD, as well as 100 per cent ownership of its freehold properties – on Wednesday.

The regulator’s investigation into the deal would focus on three areas, including how Woolworths and PFD compete in the supply of food and groceries and whether the proposed acquisition would “increase Woolworths’ position as a wholesale buyer of food and the possible impacts of this”.

It would also look into if there were similar alternative wholesale suppliers of groceries that had a comparable geographic reach and product range to PFD.

PFD is the No.2 player in the food services market, owned by the the Smith family, headed by Melbourne-based Rick Smith and Kerry Smith.

The deal was announced to the market in August and forms part of Banducci’s ‘retail ecosystem’ strategy, unveiled in July last year.

Woolworths was advised by UBS banker Aidan Allen – who is set to join Jarden Australia in coming months – on the deal, while Macquarie Capital tended to PFD.

The regulator was seeking responses by October 9.