The acquisition of Spicers by Paperlinx will go ahead following undertakings of divestitures by Paperlinx to resolve Australian Competition and Consumer Commission concerns.
The Acting Chairman of the Australian Competition and Consumer Commission, Mr Rod Shogren, said today that the ACCC considered that the original proposed acquisition of Spicers by PaperlinX was likely to result in a substantial lessening of competition in the market for the supply of fine paper by merchants.
In assessing whether or not the proposed acquisition would be likely to substantially lessen competition, the ACCC sought the views of industry participants. In speaking to these participants about the proposed acquisition, the ACCC found that there were strong concerns that the acquisition would have a negative effect on competition in the fine paper market.
PaperlinX has presented the ACCC with draft undertakings designed to overcome the ACCC’s competition concerns. The undertakings include the divestiture of the Edwards Dunlop and Commonwealth Paper paper merchant businesses. The ACCC is satisfied that, subject to negotiation and implementation of terms in the undertakings that satisfactorily address its concerns, including the effective divestiture of these paper merchants as viable operating businesses from the combined PaperlinX/Spicers, the proposed acquisition would not be likely to be a breach of s50 of the Trade Practices Act 1974.
PaperlinX had previously offered undertakings to the ACCC that included the divestiture of Edwards Dunlop. However the ACCC was not satisfied that this divestiture would be sufficient to alleviate the competition concerns that would arise from the acquisition.
Mr Shogren said that the ACCC would work closely with PaperlinX to effect the divestiture necessary to ensure that sustainable and effective competition is maintained in the market.