Nuplex Industries (Aust) Pty limited - proposed acquisition of Acquos Masterbatch

Summary

Nuplex proposed to acquire the Masterbatch business assets of Acquos, including plant and equipment in Melbourne and Sydney.

Nuplex and Acquos both manufacture and supply Masterbatch which is a concentrate used to colour a neutral tone plastic. Masterbatches vary from standard black and white, colours, additive Masterbatches that achieve a functional aspect such as optical brighteners, UV stabilizers and flame retardant and special effects Masterbatches which achieve metallic, fluorescent and transparent effects.

Market definition

The parties overlap in the manufacture and supply of Masterbatch. The ACCC considered the competitive effects of the proposed acquisition in a narrow market for the supply of Masterbatch and a broader market for Masterbatch and Compound. The ACCC did not consider it necessary to form a definitive view regarding market definition as the proposed acquisition was unlikely to raise concerns regardless of the market definition applied.

Competition analysis

The ACCC considered that the proposed acquisition was unlikely to result in a substantial lessening of competition in any relevant market for the following reasons:
- the potential for imports to act as a competitive constraint;
- barriers to expansion are relatively low;
- low customer switching costs; and
- the existence of a number of alternative manufacturers with excess capacity which would compete with the merged firm post-acquisition.