Consolidation of the Australian packaging market continues, this time in the plastics sector as Pact Group gets set to make its next acquisition.
The group has made no secret about its aggressive acquisition strategy and the 'strong pipeline' of businesses it is targeting.
Power Plastics is next on the list, following the Australian Competition and Consumer Commission ACCC's announcement today that it will 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,” ACCC chairman Rod Sims said.
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.”
“In addition, some customers may have the ability to sponsor expansion by smaller manufacturers, or alternatively to commence manufacturing the products in-house,” Sims said.
Pact is listed on the ASX and manufactures a diverse range of plastic and non-plastic packaging products. Pact’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.
