The Commerce Commission today cleared Nuplex Industries Limited and Nuplex (Holding) Pty Limited to acquire Australian Chemical Holdings Limited (ACH).
Commission Deputy Chairman Peter Allport said that the Commission was satisfied that should the proposal go ahead, then Nuplex would not acquire or strengthen a dominant position in any market.
Nuplex Industries is an Auckland-based company that manufactures and distributes synthetic resins, polymers and construction products for use in paint, other surface coatings, adhesives, printing inks and fibreglass reinforced plastics. Through wholly owned subsidiaries, it also collects, treats and disposes of hazardous wastes. Nuplex Holding was formed in Australia this month for the purpose of making a bid for ACH.
ACH is Australian registered and operates in New Zealand, Australia and Vietnam. In New Zealand, through its wholly owned subsidiaries A C Hatrick (NZ) Limited and Essar (NZ) Limited, it manufactures and imports a wide range of chemicals - including ranges similar to those produced by Nuplex Industries - and food ingredients.
The Commission concluded that the only areas in which the proposal would lead to aggregation of market power were the New Zealand-wide markets for the:
· manufacture and distribution of aqueous dispersions;
· manufacture and distribution of alkyd resins; and
· manufacture and distribution of unsaturated polyesters.
Mr Allport said that the Commission was satisfied that, should the proposal go ahead, strong local competition and imports would prevent Nuplex acquiring or strengthening a dominant position in the market for the manufacture and distribution of aqueous dispersions.
In the other two markets, the proposed acquisition would give Nuplex high market shares, outside the "safe harbours" published by the Commission in its Business Acquisitions Guidelines. The exact market shares are commercially sensitive and have been treated as confidential by the Commission.
The safe harbours are a market share of up to 40 percent if there is no other significant competitor and up to 60 percent if at least one competitor has a market share of 15 percent.
Mr Allport said that, in this case, the Commission is satisfied that competitive constraints from existing and potential imports into New Zealand, and from the substantial buying power of the manufacturers who use the chemicals in question would prevent Nuplex acquiring or strengthening a dominant position in the markets for the manufacture and distribution of alkyd resins and unsaturated polyesters.
The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any market. Parties can apply for a clearance, which the Commission will grant if it is satisfied that dominance is not acquired or strengthened.
Public copies of the Commission's decision are available from reception at its Wellington office, level 7, Landcorp House, 101 Lambton Quay.
Media contact: Commerce Act Manager Jo Bransgrove
Phone work (04) 498 0958
Communications Officer Vincent Cholewa
Phone work (04) 498 0920
Commission media releases can be viewed on its web site www.comcom.govt.nz
