The PMP Limited (ASX: PMP) share price rocketed a whopping 21% this morning after the printing company updated the market on a positive development regarding its proposed merger with IPMG.
As I explained here, in December the PMP share price came crashing down after the Australian Competition and Consumer Commission (ACCC) expressed concerns over its proposed merger with IPMG.
The ACCC was concerned that "the merger may substantially lessen competition in the supply of heatset web offset printing, the main method for printing catalogues and magazines."
But the good news for PMP is that after discussions with industry participants the ACCC has advised that it will not oppose the merger.
Although ACCC Chairman Rod Sims said the ACCC believes the merger is likely to lessen competition, they don't believe it will reach the threshold of being a substantial lessening of competition.
Mr Sims added that: "Since the ACCC opposed a proposed merger between PMP and IPMG in 2001, there has been a significant reduction in demand for magazine printing and there is excess capacity in the industry."
He also pointed to rival IVE Group Ltd (ASX: IGL) as being likely to constrain the merged company following recent acquisitions and tender wins.
Is it in the buy zone?
Today's news is certainly great for the company. I believe the successful merger between the two companies will result in an industry giant.
Although I feel PMP is still an attractive option for investors wanting exposure to the printing industry. At current prices I still have a preference for rival IVE Group despite today's news.
