Competition Commission prohibits cardboard manufacturers’ merger
The Competition Commission has prohibited packaging manufacturer Corruseal’s proposed acquisition of Boxlee and Pride Pak, as it is likely to substantially prevent or lessen competition.
Corruseal owns varying interests in several businesses, most of which operate in the industry for the manufacture and supply of packaging products including containerboard paper and corrugated board, as well as corrugated packaging.
Boxlee and Pride Pak manufacture and supply corrugated boxes and packaging, including single face board, regular slotted containers, dye cut self-erecting containers and trays.
The commission found that, as Corruseal, Boxlee and Pride Pak are in a horizontal and vertical relationship, the proposed transactions were not likely to result in unilateral effects.
“The industry and its affected markets are already characterised by high levels of concentration along the value chain, market transparency, multimarket contact, high and increasing barriers to entry, among other considerations,” the commission said in a statement, noting that the proposed transactions were likely to strengthen coordination.
“Post-merger, it would be easy to reach terms of coordination and monitor deviations from coordinated conduct.
“Further, and considering the concerns received during the investigation, we are concerned about the foreclosure of market participants that are not vertically integrated or engaged in coordinated conduct in the industry and in the affected markets,” it stated.
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