Melbourne-based Pact Group Pty. Ltd. has dropped its bid for Viscount Plastics Pty. Ltd. of Melbourne, part of global packaging and supply-chain firm Linpac Group Ltd. of Birmingham, England.
The deal would have marked Pact's third takeover in a year of a rival plastics firm. The move prompted Australia's competition watchdog to launch an inquiry to assess the deal's likely market impact as well as revisit corporate and family links between Pact and another of the nation's biggest privately owned packaging firms, Melbourne-based Visy Industries Pty. Ltd.
But the Australian Competition and Consumer Commission scrapped the inquest when the parties said July 1 that the deal was off, an ACCC spokesperson said. ACCC did not offer reasons for the deal's collapse. Pact did not respond to a request for comment.
The Pratt family owns Visy, which makes plastic packaging such as PET bottles, preforms and jars. Visy also makes paperboard and cardboard cartons and operates a recycling business.
Pact manufactures packaging products, including bottles and containers and closures made of PET, high density polyethylene and polypropylene at plants in three Australian states Queensland, New South Wales and Victoria.
Pact, a holding company owned by the Geminder family, is headed by Raphael Geminder, son-in-law of Visy Chairman Richard Pratt. ACCC already had examined commercial and personal links between Pact and Visy in assessing previous Pact purchases such as its acquisition of VIP Plastic Packaging Pty. Ltd. from Visy in 2003.
Visy has been fined $A36 million for participating in a packaging industry price-fixing cartel and Pratt now faces criminal charges brought by ACCC for allegedly giving false information to its cartel inquiry.
Both Pact and Visy maintain that they operate independently. ACCC has said the firms ``have taken steps to increase the separation'' between them since the VIP deal, including a reduction in corporate and shared services Visy provides Pact and the resignation of Pact directors from the boards of Visy-related entities.
Had Viscount been approved, it would have been Pact's third plastics acquisition in a year. In July 2007, ACCC approved Pact's purchase of Melbourne-based Baroda Packaging Pty. Ltd., after considering its potential effect on market competition for nonbeverage containers, blow molded bottles, small industrial containers and plastic pails.
In October, the commission said it would oppose Pact's buyout of another Melbourne firm, Brickwood Holdings Pty. Ltd., initially saying the deal would ``substantially lessen competition'' in the PET bottle market. It referred to family and commercial relationships between Pact and Visy, a significant PET bottle supplier, including a shared-services agreement. But in April, the commission gave the deal a go-ahead, saying it had not found sufficient evidence to support that claim.
ACCC had identified areas of ``overlap'' among Pact, Visy, Brickwood and Viscount, including manufacturing and supplying plastic pails, plastic cartridges such as those used in glue or filler ``guns'' in building trades, and PET beverage bottles in Western Australia. It said Viscount and Pact are the only two suppliers of plastic cartridges and Viscount and Visy are the only manufacturers of PET beverage bottles in the region.