Australia’s competition regulator has given the go-ahead for Ive Group to buy Ovato from the administrator, arguing that no-one else was likely to do so.
The ACCC fast-tracked its review process to just 14 days, acknowledging that if the purchase went ahead Ive would become the country’s largest heatset web printer, and “for some customers, would likely be the only supplier who could meet their print volume and timeliness requirements.
“Market participants raised concerns that IVE could therefore increase prices and/or reduce service levels,” it said.
The regulator says it decided Ovato was a “failing firm” and following liquidation, there was “not a real chance” that its heatset printing assets would be used to compete in the Australian market.
It thought it “highly likely” that the press and associated equipment would either be sold overseas or for scrap. Some industry players had expressed concern if this were to happen.
The ACCC concluded there was “no real chance” that Ovato or its key heatset web offset printing assets would continuing operating in the market absent the proposed acquisition.
Ive Group has agreed to buy “substantially all” of Ovato’s assets for about $16 million, maintaining its sites at Warwick Farm, Sydney and Bibra Lakes, WA. Ovato’s printing plants in Brisbane and Cairns will be closed, while a packaging business in the state capital is not included.
Ive plans to operate the Warwick Farm for “18-24 months” while it reviews the business and moves machinery to its other sites.