Amcor Limited - proposed acquisition of certain businesses of Alcan Packaging from Rio Tinto Plc

Summary

Amcor Limited proposed to acquire the following businesses of Alcan Packaging from Rio Tinto plc:
- Global Tobacco,
- Global Pharmaceuticals,
- Food Europe, and
- Food Asia.

Market definition

The ACCC considered the proposed acquisition in the context of a national market for screwcap wine closures.

However, for the purposes of the competition analysis, the ACCC did not consider it necessary to reach a definitive view in relation to market definition.

The ACCC also noted there was some limited overlap between the merger parties in the supply of flexible retort pouches in Australia.

Competition analysis

The ACCC formed the view that the proposed acquisition was unlikely to result in a substantial lessening of competition in the relevant market on a horizontal or conglomerate merger basis. Factors informing this conclusion included:
- post-acquisition there would remain two local competitors to the merged entity, including the largest screwcap wine closure manufacturer in Australia;
- independent imports would be likely to provide a constraint on the merged entity;
- there was significant excess capacity in the relevant market;
- there is a history of sponsorship of new entrants in the relevant market which indicated a likely ability by major customers to bypass the merged entity by sponsoring a new entrant or expansion of an existing manufacturer in the event that they perceived an incentive to do so; and
- ACCC market inquiries confirmed that the proposed acquisition was unlikely to increase Amcor Limited's ability or incentive to bundle screwcap wine closures with other packaging products.