Australian regulators approve Visy's acquisition of PET and plastics assets of HP Industries, says customers have alternative options for PET and plastic containers supply other than merged firm
March 21, 2012
– The Australian Competition and Consumer Commission will not oppose Visy Industries Australia Pty Ltd's proposed acquisition of the PET and plastics assets of HP entities, which have had receivers and managers appointed.
"Following extensive market inquiries, the ACCC formed the view that customers had alternative options for the supply of PET and plastic containers other than the merged firm, and which were also independent of Pact Group Pty Ltd," ACCC chairman Rod Sims said.
While these manufacturers are not currently as large as HP or Pact Group Pty Ltd, the ACCC considered that the ability of these smaller manufacturers to expand to meet the requirements of medium – large customers meant that they were likely to provide a constraint on the merged firm.
Mr Sims said that "market inquiries also indicated that a range of market participants are currently self-manufacturing their own PET and rigid plastic container requirements or are considering self-manufacturing their own requirements."
"This indicates that many customers are likely to hold countervailing power enabling them to bypass the merged firm and Pact Group Pty Ltd."
The market inquiries conducted by the ACCC, following the Statement of Issues published on 29 February 2012, were carried out on an expedited basis, recognising the position of the relevant HP entities.
The ACCC notes that receivers were appointed to the relevant HP entities on 6 December 2011 and that the receivers entered into arrangements with Visy a few weeks later.
While the ACCC acknowledges the importance of receivers acting promptly to realise the value of secured assets, it is important for receivers to also be aware of any potential competition concerns associated with the sale of businesses or assets when they are dealing and making arrangements with potential purchasers.
Irrespective of any such arrangements and commercial time pressures, receivers should be aware that the ACCC will always fully investigate and consider the competition implications of any proposed transaction which raises potential competition concerns, as it did in the present case.
Visy Industries Australia Pty Ltd - proposed acquisition of PET and plastic assets of HP entities
Review type: Informal Review
Date completed: 21st March 2012