Acquirer: CSIRO Forestry and Forest Products; Target: The New Zealand Forest Research Institute Limited
Summary
The Forestry and Forest Products division of the Commonwealth Scientific & Industrial Research Organisation (CSIRO) and The New Zealand Forest Research Institute Limited propose to enter into a joint venture that will provide research and development services in the following areas: pulp, paper and packaging; wood and fibre quality; wood processing and products; and tree improvement and germplasm.
Outcome
Not Opposed
Date completed
25th May 2004
Merger type
Horizontal
Guidelines thresholds
Below
Imports about 10%
No
Market definition
The relevant market was considered to the national market for the supply of research and development services in the area of forestry and forest products.
Competition analysis
Although precise market shares were unavailable, it appeared unlikely that the proposed joint venture would exceed the Commission's concentration thresholds.
The Commission considered that the proposed acquisition is unlikely to substantially lessen competition due to the following factors:
* international R&D agencies represent a potential source of competitive constraint to the joint venture;
* barriers to entry appear to be low;
* there would remain a number of alternative suppliers, including: universities, several CRCs, state R&D organisations and technically-based industry associations;
* there appears to be significant countervailing power in the hands of knowledgeable and well-resourced customers; and
* anecdotal evidence suggests that the proposed joint venture may result in efficiency gains that may be passed on to customers in the form of reduced prices and better output.
On this basis, the Commission decided to not interevene in the proposed joint venture.
