Commission Clears Zenith Water / Waterlogic Merger Subject To Divestment

The Commerce Commission has given clearance to Osmosis Buyer Limited (Osmosis) to acquire Firewall Holdings S.À R.L (Firewall) as part of a global transaction, subject to an undertaking to divest Firewall’s Merquip business.

Osmosis’ New Zealand subsidiary, Zenith Heaters Limited (trading as Zenith Water), supplies and services multi-function taps that dispense instant filtered, boiled, chilled and sparkling water from a single outlet. Firewall’s subsidiary, Waterlogic New Zealand Limited (trading as Merquip), is a New Zealand supplier and service provider of drinking water dispensers.

Under the divestment undertaking, Osmosis must sell the Merquip business to a purchaser to be approved by the Commission, and within a specified timeframe.

Commission Deputy Chair Sue Begg says “without the divestment, the proposed transaction would result in the merger of two significant distributors of drinking water solutions in New Zealand – Zenith Water and Merquip.”

“However, the sale of the Merquip business to a third party purchaser will ensure that these two companies continue to compete under separate ownership. Given this, the Commission is satisfied that the proposed transaction is unlikely to substantially lessen competition in any relevant market.”

A public version of the written reasons for the decision, including the divestment undertaking, will be available on the Commission’s case register in due course.

Background
Osmosis Buyer Limited is a portfolio company of BDT Capital Partners, LLC. It controls entities that operate the Culligan group, an international provider of water treatment solutions. In relation to New Zealand, Culligan controls Zip Industries, whose principal business is Zenith Water. Culligan acquired Zip Industries in 2017.

Firewall Holdings S.À R.L is a portfolio company of Castik Capital Partners GmbH. It is the majority shareholder in Waterlogic Group Holdings Limited, which owns Billi Australia Pty Limited, an Australian-based business that makes, sells, and supplies Billi-branded multi-function taps. In 2021, Waterlogic acquired the business and assets of Merquip Limited.

We will give clearance to a proposed merger if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market. In giving clearance, the Commission may accept a written undertaking from the Applicant to dispose of assets or shares.

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