Elders, NZFP submit case

Press, 29 January 1988, Page 20

Elders, NZFP submit case

Building supplies shops, finance, the meat industry, and kiwifruit exporting were the markets that involved some crossover between Elders Resources and N.Z. Forest Products, the companies said. In their submission to the Commerce Commission, the two companies said that only retail building supplies could "heoretically’’ be affected by the proposed merger. This was where both Elders Pastoral and Benchmark Building Supplies, both subsidiaries of the two companies, ran outlets. But in practice, the aggregation of those outlets would not affect the market because there were significant competitors and barriers to entry were low,, they said in a statement. In addition, the market was “discerning and competitively inclined” and products carried in the outlets were diverse. Elders and NZFP said that their merger involved none of the market domination problems that had stopped other merger and take-over proposals involving NZFP Forest Products, and it would bring significant benefits to New Zealand. It was likely to benefit the

country’s over-all international marketing effort, the companies said. It would also benefit closer economic relations with Australia and maintain a competitive balance between the three large competitors in New Zealand wood markets. The merger would also improve earnings through establishing a counter-cyclical balance of resources, enhance their management and marketing skills, give financial strength, including an improved capacity for capital funding, and bring stability to NZFP’s share register. Associated companies of NZFP, such as Crown Corporation and Newmans Group could also benefit from the new link with Elders Resources, and its parent Elders IXL. Elders had extensive international marketing networks, in particular in the key markets of Asia and the United States. These could be used to enhance the marketing effort of this country’s export sector generally, without weakening competition in domestic markets. In the other means of “cross over,” finance, meat, and kiwifruit, a merger would have no real impact on competition in those markets.