The Australian Competition and Consumer Commission (ACCC) has given Australia’s biggest plastic packaging manufacturer Pact Group the go-ahead to acquire NSW plastics manufacturer Power Plastics.
In a statement, the consumer watchdog said it would not oppose the proposed acquisition of Power Plastics Pty Ltd (Power Plastics) by a subsidiary of Pact Group Holdings Limited (Pact) (ASX: PGH).
Pact and Power Plastics both manufacture PET and non-beverage rigid plastic containers in New South Wales.
“While the ACCC concluded that the proposed acquisition would be likely to lessen competition, we did not consider that we had sufficient information to be satisfied that this lessening of competition would be substantial,” said ACCC chairman, Rod Sims. The ACCC determined that, following the proposed acquisition, Pact would continue to face some competitive constraint from other manufacturers in NSW and, to some extent, from Victoria and Queensland.
“Other manufacturers of similar products are not as large as Pact or Power Plastics, but we consider that some could possibly expand to meet customer requirements,” said Sims. “In addition, some customers may have the ability to sponsor expansion by smaller manufacturers, or alternatively to commence manufacturing the products in-house.”
Pact is listed on the ASX and manufactures a diverse range of plastic and non-plastic packaging products. The company’s product range includes rigid plastic food containers, polyethylene terephthalate (PET) and high-density polyethylene (HDPE) bottles, jars, tubes, jerry cans, cubes, pails, plastic and steel drums, trays and closures.
Power Plastics is a NSW-based manufacturer of PET and non-beverage rigid plastic containers up to 5L.
Pact Group Holdings is due to release its 2016 half year results on Wednesday 24th February.