The Australian Competition & Consumer Commission (ACCC) has announced that it will not oppose IVE’s proposed acquisition of Ovato.

Both IVE and Ovato Limited are Australian companies specializing in print services and are responsible for printing catalogues for retailers, such as JB Hi-Fi and Spotlight.

Ovato has been in voluntary administration since the 21st of July 2022.

IVE is seeking to acquire it’s rival Ovato for $16 million. Only the Ovato WA site will stay operational, whilst the Geebung, QLD and Warwick Farm NSW plants will close.

The ACCC investigated whether Ovato qualified as a ‘failing firm’, in which it would be required to liquidate its assets and leave the market if the acquisition did not go through.

Whilst the competition watchdog would usually be wary about “combining the two largest providers of heatset web-offset printing in Australia”, it concluded in accordance with their Merger Guidelines, that “IVE was the only viable purchaser of Ovato, and that if this acquisition did not go ahead, the administrators would have to liquidate Ovato’s assets.”

ACCC Deputy Chair Mick Keogh continued, saying that “while in some cases the liquidation of assets can result in a more competitive outcome than a sale to a competitor, for example if those assets are purchased by potential competitors, in this case we concluded that Ovato’s printing assets would be sold to overseas purchasers or sold for scrap. The ACCC considered there was not a real chance the heatset web offsest printing assets would continue to be operated by any other firm,”

“The feedback we received from several customers was that while they were concerned that IVE would be their only option, they were more concerned with the impact on printing capacity if Ovato’s assets were liquidated,”

“Asset or business sales by administrators are subject to the same substantial lessening of competition test as any other transaction. As there was no real chance that Ovato or its assets would continue operating in the market without the proposed acquisition, we consider the proposed acquisition is unlikely to substantially lessen competition.”

The ACCC previously announced in June that it would also not oppose the Opus Group’s acquisition of Ovato’s book printing business.