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The Competition Tribunal has rejected a merger between paper and packaging groups Neopak and Corruseal, in a case that had led to interventions by industry peers Mpact and APL Cartons.
APL had intervened amid consideration of the potential harm of its foreclosure as a consequence of Corruseal limiting or eliminating APL's ability to procure recycled paper at competitive prices from Neopak's mill. Mpact had intervened amid concerns the proposed transaction would increase the concentration of the 100% recycled containerboard market with the result that there will be a substantial lessening or prevention of competition.
In March 2022, the Competition Commission prohibited the proposed intermediate merger, which refers to the combined assets of the two parties exceeding R600 million.
The merger parties then filed a request for consideration with the tribunal, seeking to have the proposed merger unconditionally approved or, alternatively, to have it approved with conditions deemed appropriate by the tribunal.
The tribunal’s order follows a hearing held in November and December 2022 and February 2023, during which several factual witnesses as well as economic experts testified, it said in a statement on Wednesday.
Neopak produces products including containerboard speciality paper and twin-ply recycled liner, which can be laminated for commercial and local agricultural cartons. It operates from the Rosslyn Mill in Pretoria, and Amalgam Recycling in Johannesburg, according to information on its website.
Corruseal is a group of 14 companies, and dates back to 1964, now operating from seven provinces, and is as a substantial manufacturer and supplier of packaging to the SA market. Among its interests, it provides specialised solutions including for passport papers, election papers as well as cheques.
