The Australasian Catalogue Association has applauded the ACCC decision to support the merger of ASX-listed PMP and the Hannan family-owned IPMG. Kellie Northwood, CEO of the Australasian Catalogue Association, comments: “The ACA is pleased with the ACCC decision to support the merger. The catalogue and wider print industry has experienced and continues to experience significant challenges which require strategic consideration to ensure a strong future."
Australian Competition and Consumer Commission chairman Rod Sims said it was it was "a finely balanced decision". Currently the two companies hold around 75 percent of the market between them.
"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.
The ACCC expressed concern about the merger when the companies announced their plans in October, saying it would look at the impact of competition in the magazine and catalogue printing industry.
A previous merger attempt by the two companies was rejected in 2001 but Sims said market conditions had since changed. "There has been a significant reduction in demand for magazine printing and there is excess capacity in the industry," he said.
Sims also said the recent expansion of ASX-listed print and communications business IVE Group was likely to provide competition to the merged PMP-IPMG.
Under the merger plan, PMP will acquire IPMG's business by issuing PMP shares at 63.5 cents a share. Post-merger, the Hannan family will own 37 per cent of the combined business.
The companies say the merger will save $40 million a year in costs and help them remain competitive in a declining printing market.
Northwood said, “The ACA would like to thank the industry, retailers, and key stakeholders who have given valuable time and support in regards to the issue over the past year to assist on building a sustainable future for the industry. The ACA is also grateful to the ACCC's consideration to our submission and to our ongoing engagement. Congratulations of course to PMP and IPMG on the news.”