The ACCC has approved the PMP IPMG merger, with chairman Rod Sims saying it was a finely balanced decision.
“While the ACCC considers that the merger is likely to lessen competition we do not believe that it reaches the threshold of being a substantial lessening of competition,” he says.
“Market conditions have changed since the ACCC opposed a proposed merger between PMP and IPMG in 2001. There has been a significant reduction in demand for magazine printing and there is excess capacity in the industry.
“Furthermore, the IVE group has recently expanded through acquisitions and winning major tenders. We consider that IVE is likely to constrain the merged company. Other smaller printers and newspaper publishers also compete in this market,” he adds.
[Related: ACCC merger concerns]
Peter George, CEO, PMP says, “We are delighted to now be able to complete the merger. It creates the opportunity for us to build a competitive and sustainable new company with significant synergy benefits,” he says.
Last week, the PIAA urged the ACCC to let this merger pass with CEO Andrew Macaulay saying, “‘An ACCC blockage would lock the market in its present state – lacking in efficiency, with excess capacity and obsolete equipment. In so doing, the ACCC would be consigning the market and the industry to the past.”
In October, PMP and IPMG announced its merger with George saying, the company’s acquisition of IPMG will deliver significant cost savings that are crucial in a difficult business environment.
“PMP and IPMG have taken decisive action to bring about the proposed merger so that we can combine and adapt to the realities of Australia’s print industry in the decade ahead, in the process creating sustainability and value for our customers,” says George.
[Related: PMP to merge with IPMG]
ACCC will release a public competition assessment outlining further information about its conclusions in due course.
The new combined entity will have a revenue of $1.28bn, with PMP’s 2015/16 income $820m and IPMG’s at $362m.
Under the terms of the deal the Hannan family will get 37 per cent of PMP shares and two seats on the board.
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