The Australian Competition and Consumer Commission will not intervene in the acquisition of Fletcher Challenge Paper, Fletcher Challenge's paper division, by the Norwegian company, Norske Skogindustrier, ACCC Chairman, Professor Allan Fels, said today.
NSI has no Australian subsidiaries but imports uncoated groundwood paper into Australia via its partial shareholding in PanAsia.
"In reaching this decision, the ACCC conducted market inquiries with a range of purchasers of uncoated groundwood paper", Professor Fels said. "These included the major Australian publishers - News Limited, John Fairfax Holdings Limited and West Australian Newspapers Holdings Limited - which consume the bulk of newsprint in Australia.
"FCP is currently the only manufacturer of newsprint and other grades of uncoated paper in Australia, therefore the acquisition by NSI of FCP is likely to result in an increase in the concentration of ownership in the industry.
"However market inquiries revealed that there are a number of overseas mills independent of FCP from which Australian publishers can source. These provided significant import competition to NSI/FCP.
"The ACCC also considers that the major Australian publishers possess some degree of countervailing power in their negotiations with the merged entity.
"Under these circumstances, the ACCC has decided that the acquisition of FCP by NSI was unlikely to result in a substantial lessening of competition".