ACCC commissioner Stephen Ridgeway said at the time that it had the “strongest competition concerns” over New Forests’ bid, but the Sydney-headquartered asset manager withdrew its bid after the watchdog expressed its concerns.
In a statement today, Ridgeway said the Global Forest bid had also raised “some preliminary competition concerns,” but only in north-eastern Tasmania. Having considered further information from market participants, the ACCC decided that the acquisition is “unlikely to substantially lessen competition.”
“We had concerns the Global Forest Partners acquisition could impact the viability of competing exporters of hardwood plantation chips in north-eastern Tasmania, which had the potential to lower prices paid to private growers of plantation logs,” Ridgeway said.
“After further investigation, we found that there is likely to be enough supply of chipping logs from private growers to provide a third export operator with sufficient volumes to attract international buyers. We also found that the volumes of private plantation logs for sale should increase over the next couple of years, giving competing buyers even more scope to increase their volumes.”
Resource Management Service is selling its hardwood plantations in Tasmania and its one-third stake in wood chip marketing and export business, the Plantation Export Group, through a competitive tender process.
RMS had not responded to a request for comment at the time of publication.
Global Forest Partners already owns hardwood plantations and wood-chipping mills in the state, and exports wood chips through its own facilities. The ACCC decision comes with no conditions on divestment of existing or new assets.
New Forests is currently the largest operator of hardwood plantations in Tasmania and funds controlled by it own wood-chipping mills in the Burnie area of north-west Tasmania and at Long Reach, north-east Tasmania. It also has its own wood-chip marketing and export business, and manages funds which own softwood plantations and a timber mill.