The Australian Competition and Consumer Commission has given the green light to the merger between PMP and IPMG, clearing the way for the two largest commercial printers in the country to become one. This completes the consolidation of Australia's five largest web printers into two after IVE Group bought Franklin Web and AIW last year.
In a statement, Rod Sims, chairman of the ACCC, said he did not believe the merger would substantially decrease competition in the heatset web offset printing market. “This 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,” Sims said.
Though the ACCC had knocked back a similar proposal in 2001, Sims said market conditions have changed since then. “There has been a significant reduction in demand for magazine printing and there is excess capacity in the industry,” he said.
The announcement comes after the ACCC waved through IVE Group's buyouts of Franklin Web and AIW in December last year. “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 the market,” Mr Sims said.
Printing Industries CEO Andrew Macaulay said the Association is pleased with the ACCC's decision, having made a submission in support of the merger earlier this month. "When we surveyed our membership, everyone who responded said that was what they wanted. The Board charged us with making our submission to the ACCC and we’re very grateful that the ACCC listened to us. This merger will be very good for the industry," Macaulay said.
PMP CEO Peter George said the company is 'delighted' to 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 said in a release.
Kellie Northwood, executive director of the Australian Catalogue Association, which had made a substantial submission to the enquiry, said the ACA was also happy with the result, which she said would build a sustainable future for the industry. "The catalogue and wider print industry has experienced, and continues to experience, significant challenges which require strategic consideration to ensure a strong future," Northwood said.
Michael Hannan, executive chairman of IPMG, called the merger an important event for the industry, as well as IPMG staff and customers. "It will enable longevity for Australian printing and jobs, and scale and sustainability for our business," he said.
The ACCC had released a 'Statement of Issues' expressing concern about the merger in December, delaying the deal by several months. It is expected to be completed by March 1.