The Commerce Commission today cleared Carter Holt Harvey (CHH) to acquire up to 100 percent of Forestry Corporation of New Zealand's Central North Island assets or up to 100 percent of its shares.
The Government has not yet decided if it will sell Forestry Corp, nor what form any possible sale would take.
Commission Chairman Dr Alan Bollard said while the proposed acquisition would strengthen CHH's position in the markets for the production and supply of logs and woodchips in the Central North Island, and sawn timber in the North Island, it would not lead to CHH acquiring dominance in these markets.
The Commerce Act allows parties to a business acquisition to apply to the Commission for clearance. It will be given if the Commission is satisfied that dominance is not acquired or strengthened.
A Fletcher Challenge subsidiary, Tasman Forestry, and other companies would still provide competition in the production and supply of logs, exporters can switch at least some of their logs to domestic markets, and some log users can be supplied from outside the Central North Island.
"It is our view that such factors are likely to ensure that the combined CHH/Forestry Corp would not acquire or strengthen a dominant position in this market," Dr Bollard said.
"We have concluded that the markets for sawn timber and woodchips are both characterised by competition, and it is considered that implementation of this proposal would not raise dominance concerns in these markets."
Media contact: Communications Officer, Vincent Cholewa
