ACCC expresses PMP IPMG merger concerns

PMP's share price has plummeted this morning as the ACCC indicates it may block the proposed merger between PMP and IPMG, partly as a result of rival IVE buying Franklin Web and AIW.

The PMP stock price fell by almost a fifth, 18.1 per cent in early trade, back to the 64c level it had before the merger deal was announced.

The Commission has released a statement expressing what it says are ‘initial concerns’. Its preliminary view is that ‘the merger may substantially lessen competition in the supply of heatset web offset printing’.

ACCC chairman Rod Sims says, “the ACCC is concerned that as the two largest suppliers in heatset printing the merger of PMP and IPMG may see a reduction in competition with the number of significant suppliers in the market going down from three to two.”

The ACCC is also looking at distribution. "The ACCC is also considering whether a merged PMP IPMG could ‘foreclose’ rival catalogue distributors, particularly through offering customers a bundled print and distribution arrangement", says Sims.

The Commission is asking that all submissions be with its office by 9am, January 31. A final decision is expected February 23.

The proposed merger will see IPMG owners take 37 per cent of PMP shares. It will create a $1.3bn business. It will also see the rationalisation of the press and binding fleet with older equipment decommissioned, and may see entire plant closures.

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