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Statement of Preliminary Issues released for Daiken/Dongwha

17 October 2017

The Commerce Commission has published a statement of preliminary issues relating to the proposed acquisition of Dongwha New Zealand Limited by Daiken New Zealand Limited.

The statement outlines the main issues the Commission considers important in deciding whether or not to grant clearance to the proposed merger. 

The Commission invites submissions from those who consider they have information relevant to our consideration of the proposed merger. Submissions can be sent by email to registrar@comcom.govt.nz with the reference Daiken/Dongwha in the subject line. Any submissions should be received by close of business on Thursday 2 November 2017.

The Commission is currently scheduled to make a decision on the application by 30 November 2017. However, this date may be extended as the investigation progresses, and in particular, if we need to test and consider the issues identified further. 

The statement of preliminary issues and public version of the application can be found on the clearances page.

Background

Daiken is the New Zealand subsidiary of Daiken Corporation, a Japanese company specialising in the manufacture and supply of wood-based construction materials. In New Zealand, Daiken manufactures and supplies medium density fibreboard (MDF) from a plant it operates in North Canterbury. 

Dongwha is 80% owned by Dongwha International Co., Limited (a company incorporated in Hong Kong) and 20% owned by Laminex Group (N.Z.) Limited. In New Zealand, Dongwha manufactures and supplies MDF from a plant it operates in Southland. Its minority shareholder, Laminex (which is part of Fletcher Building Products Limited), purchases MDF from Dongwha for its own wood products business in New Zealand. Laminex also on-sells some of the MDF it purchases from Dongwha to other parties.