Summary
Norske Skogindustrier ASA - proposed acquisition of the 50 per cent interest of Abitibi-Consolidated Inc in PanAsia Paper Co Pte Ltd.Market definition
Market for uncoated groundwood paper (including newsprint, improved newsprint and directory paper).Competition analysis
The ACCC concluded that the proposed acquisition would be unlikely to substantially lessen competition in the relevant market because:(i) most newsprint is acquired from Norske Skog (Australasia) Pty Ltd (a subsidiary of Norske Skogindustrier ASA) on long term contracts. The proposed acquisition is unlikely to affect the existing operation of these long term contracts. Further, bargaining power is evenly balanced between Norske Skog and publishers - Norske Skog needs local buyers and publishers need local supply. Consequently, the proposed acquisition is unlikely to affect the future renegotiation of the long-term contracts; and
(ii) while the proposed acquisition would result in the removal of a significant competitor to Norske Skog for the supply of newsprint to publishers outside of the long-term contracts, the ACCC concluded that, on balance, this was unlikely to constitute a substantial lessening of competition in the market overall.
Initiation
Parties