The Independent Consumer and Competition Commission (ICCC) has given its Clearance to Paradise Company Limited (Paradise Co) to proceed with its proposed acquisition of shares in Hugo Canning Company Limited (Hugo).
This is after ICCC found no serious concerns of likely negative effects this purchase may have on competition in the country.
On 04th December 2020, Paradise Co lodged a Clearance application seeking approval from the ICCC to proceed with acquiring Hugo.
Paradise Co is 100% owned by local companies; namely Nambawan Super Limited and Comrade Trustees Limited, having 91% and 9% interest, respectively. Paradise Co is in the food manufacturing business but more specifically manufactures biscuits, chocolates and beverages (bottled water).
Hugo, on the other hand, manufactures and distributes imported canned protein. It manufactures the famous Ox & Palm corned beef and the exclusive local importer and distributor of Ocean Blue branded tinned fish, besides other products. Since it is owned by HJ. Heinz Company Australia Limited (Heinz), an Australian company, it also does exclusive distribution of Heinz’s products in PNG.
ICCC Commissioner and Chief Executive Officer, Paulus Ain in a statement said the proposed acquisition required ICCC’s approval because the transaction value was greater than K50 million and would result in Paradise Co having more than 50% market share in the affected relevant markets, crossing the two mandatory notification thresholds (for Clearance application).
“For any clearance applications, the ICCC is required to assess competition effects associated with the proposed acquisition.” Commissioner Ain said.
“If the ICCC is not satisfied that a proposed acquisition will not have, and will not be likely to have, the effect of substantially lessening of competition in a market, the ICCC declines to give clearance for that proposed acquisition.”
“Conversely, the ICCC gives clearance if it is satisfied that a proposed acquisition will not have, and will not be likely to have, the effect of substantially lessening of competition in the relevant market.”
Commissioner Ain added that the ICCC assessed Paradise Co’s Clearance Application and was satisfied that the Proposed Acquisition, if it proceeds, would not have, or would not be likely to have, the effect of substantial lessening of competition in the identified markets.
In light of this conclusion, on 31st December, 2020, the ICCC gave Clearance for this proposed acquisition to proceed.