Blue Star and IPMG merger is called off

A step too far for industry consolidation as the Selig and Hannan families pull back from the brink of creating Australia’s largest printing company. Too many uncertainties and the potential costs of rationalising up to seven sites with all the disruption that entails in redundancies and transferring of equipment weighed against the benefits of the proposed $700 million merger.

In a brief statement, Geoff Selig, managing director of Blue Star still maintains there are significant benefits to the merger and the need for meaningful industry consolidation. However following a process of due diligence it has been determined, that the cost to rationalise the businesses and the risks associated with the implementation outweigh the expected benefits.

Selig was hesitant to comment further on the details of the decision to Print21, other than to say it was "disappointing, but sometimes this is just the way these things go." He remains committed to the industry-wide drive towards consolidation and improved efficiencies. Blue Star has been vigorous in its pursuit of mergers and acquisitions over the past six months. In April it announced it was buying up the former  iconic Lilyfield business from German-based STI Group, a deal which is reportedly days away from completion. Just days ago it announced a deal to pick up Paul Tannous' iGroup mailing business.

The IPMG deal was a daring bid to create the largest printing company in the region owned 50/50 by the two printing families. It will leave the two entities as large competitors and rivals, albeit with both of them in possession of detailed costings and knowledge of the work practices of the other.

IPMG remains as the second largest printing enterprise behind PMP with Blue Star continuing to grow by an energetic series of takeovers.