The deal that would end domestic carpet competition
US flooring giant Mohawk Industries already owns Godfrey Hirst and Feltex in New Zealand. Now it wants to buy Bremworth, the country’s only other significant domestic carpet manufacturer, for $70 million to $77 million via a scheme of arrangement. The acquiring vehicle is Floorscape Limited, with Mohawk as guarantor.
If cleared, a single American corporation would control both leading domestic carpet makers. That is not a nuance. It is the entire competition question.
The Commerce Commission clearly thinks so too. Its Statement of Issues, released in December 2025, laid out four areas of concern: the impact of combining two leading domestic manufacturers under one owner, the effect on prices, whether imports provide a genuine competitive constraint, and the consequences for customers.
The Commission’s language leaves little room for ambiguity: it is “currently not satisfied that the proposed acquisition will not have, or would not be likely to have, the effect of substantially lessening competition”.
Three extensions is not routine
Bremworth has described the timeline delays as “reasonably common during NZCC clearance processes”. That framing deserves scrutiny.
The decision deadline has been pushed from before Christmas 2025, to mid-March 2026, then to 2 April, and now to 29 May. Three extensions paired with a formal Statement of Issues signals a regulator that has not been given satisfactory answers. It is conducting genuine due diligence, not rubber-stamping a distressed sale.
NBR reported that the Commission’s investigation focuses specifically on market concentration, pricing effects, and whether imported carpet genuinely constrains domestic pricing power. That last question is the crux. Mohawk will argue that cheap Asian imports keep any merged entity honest. The Commission is not yet convinced, and the repeated extensions suggest the evidence is contested.
Bremworth is struggling, but that is not a competition argument
Bremworth’s financial distress is real. Half-year results to December 2025 show gross profit collapsed 25% to $6.7 million despite revenue rising 6% to $44.7 million. Gross margin fell from 21% to 15%. Cash reserves dropped from $42.2 million to $34.3 million in six months, with $1.9 million in operational cash outflows and $5.4 million in capital expenditure.
The decline traces back to a 2020 decision to exit synthetic carpets entirely in favour of a wool-only premium strategy. It cost the company market share it has not recovered. Cyclone Gabrielle then damaged the Napier plant in 2023, and a boardroom coup replaced the leadership that championed the wool pivot.
Sympathetic as the story is, a weakened competitor being absorbed by the dominant player is precisely the scenario competition law exists to interrogate. The “rescue” framing is commercially understandable but legally irrelevant. The Commission is not required to solve Bremworth’s balance sheet problems. It is required to assess whether the market works after the deal closes.
What carpet buyers should actually be worried about
For commercial fit-out contractors, residential builders, retail flooring chains, and property managers, this is not an abstract regulatory exercise. If cleared, every major domestic carpet supply negotiation runs through one company. Lead times, pricing, product range, and terms will be set by a single entity with no domestic rival of comparable scale.
Bremworth itself “remains confident in the merits of the Scheme for shareholders and New Zealand consumers”. But the Commission’s repeated extensions suggest it sees the consumer confidence differently.
The 1 July completion deadline now has barely five weeks of runway after the 29 May decision date, assuming clearance comes at all. If it does not, Bremworth faces a market that knows its financial position and a strategic review that has produced exactly one buyer.
The market was already more concentrated than anyone admitted
The most important thing the Commission’s investigation reveals is not whether this deal gets through. It is what the scrutiny tells us about market structure. If two domestic manufacturers can be combined without sufficient competitive constraint from imports, the carpet market was already more concentrated than most buyers realised. The Commission is making that structure visible before it changes permanently.
That is exactly what a competition regulator is supposed to do. Bremworth’s shareholders may want a swift resolution. The businesses that buy carpet at scale should want the Commission to take its time.
Sources
- Commerce Commission concerned over carpet company merger, delays decision – RNZ (2026-01-01)
- Commerce Commission concerned about Bremworth takeover – RNZ (2025-12-18)
- ComCom gives initial thumbs down to proposed Bremworth sale – NBR (2025-12-18)
- Commerce Commission flags competition concerns over Godfrey Hirst Bremworth deal – NZ Herald (2025-12-18)
- Bremworth FY26 Half Year Results Announcement (2026-02-01)
- NZ Competition Authority issues Statement of Issues regarding carpet manufacturing acquisition – Concurrences (2026-01-01)
- Scheme of Arrangement Update – NZ Commerce Commission – BusinessDesk (2026-01-01)