ACCC will not oppose New Forests consortium bid for Green Triangle pine plantation

The ACCC will not oppose the bid by a consortium managed by New Forests Asset Management to acquire the Green Triangle Forest Products softwood plantation business (GTFP).

GTFP, located on the South Australian-Victorian border, has been put up for sale by investment manager Global Forest Partners. New Forests Asset Management is coordinating one of the bids.

New Forests already manages funds with interests in pine plantations and a sawmill in the region.

“With the markets for plantation softwood already being highly concentrated, we examined the proposed acquisition very closely. We investigated bargaining dynamics in the markets, as well as potential alternative sources of supply should the proposed bid from New Forests be accepted,” ACCC Commissioner Stephen Ridgeway said.

“We determined that it is unlikely there would be any significant change to the competitive dynamics between participants in the markets following the proposed acquisition.”

The ACCC heard concerns from some market participants that the proposed acquisition could lead to supply shortages for processors in the Green Triangle region because the combined entity could favour the New Forests-related sawmill, or export more logs.

“Feedback from industry participants indicated that the availability of log supply is important for their ongoing viability,” Mr Ridgeway said.

“Our investigation indicated that the acquisition is not likely to substantially lessen competition in log supply, largely due to the industry’s contracting practices and long-term supply cycles.”

In addition, forestry company OneFortyOne has the largest share of plantation area in the region and will remain a large source of alternative supply in all product markets.

Further information is available at New Forests Asset Management Pty Ltd – Green Triangle softwood plantation assets of Global Forest Partners LP.

Background

Global Forest Partners LP is a US-based investment adviser that specialises in forestry investment management.

New Forests Asset Management Pty Ltd is also a forestry investment manager headquartered in Australia which operates in New Zealand, Singapore and the United States. New Forests manages funds that part-own the second largest pine plantation forest in the Green Triangle region (Penola Plantations). It also manages a fund which owns a sawmill based in the region that processes structural sawlog (Timberlink Tarpeena).

The Green Triangle region is made up of a number of softwood pine plantations spanning approximately 180,000 hectares. It is one of Australia’s major forest regions located across the border area between South Australia and Victoria.

Softwood has a life cycle of about 28 to 32 years. During this cycle, the plantation is periodically thinned to remove weaker trees and promote the growth of stronger trees. As a result, softwood plantations typically produce a range of grades of logs including structural, non-structural, roundwood and pulplog.

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