The Australian Competition and Consumer Commission said today it does not oppose Orora’s sale of its Australasian fibre business to Nippon Paper subsidiary Australian Paper.
Orora entered into a binding agreement to sell its fibre business in October for $1.72bn.
According to the ACCC Australian Paper is the only independent, non-vertically integrated, domestic supplier of certain paper packaging inputs made from kraft fibre. After the acquisition, it would become vertically integrated with one of its major customers, Orora Fibre.
The ACCC examined the likely impact of the acquisition on other buyers of packaging paper products.
ACCC commissioner Stephen Ridgeway said the key focus of the investigation was the impact of Australian Paper vertically integrating with a paper packaging manufacturer.
“We decided not to oppose this acquisition because we considered that imports and other Australasian producers of packaging paper products would continue to provide options for buyers,” Ridgeway said.
“Although imports of kraft linerboard, used to make cardboard boxes, are currently limited, we found that it is readily traded globally and is produced by several manufacturers around the world. If kraft linerboard was no longer available in Australia, we think Australian purchasers would be able to import this product at competitive prices.”
Ridgeway said the ACCC also considered that Australasian suppliers, such as Visy, Oji Fibre Solutions, or Australian Paper, would like still have the incentive to continue to supply Australian customers.
