New Zealand billionaire Graeme Hart is hatching a deal for his Carter Holt Harvey cardboard box business to join forces with its counterpart at Amcor, in a play aimed at challenging the dominance of Richard Pratt's Visy.
Mr Hart has been been in talks with Amcor for two months to form a joint venture between the separate corrugated and paper businesses of his forest products company and the Australian packaging giant. A combined operation would have revenue of about $A1 billion a year. Amcor has run a knife through the hierarchy of its cardboard box business over the past few weeks, making redundant at least three senior executives including its boss, Darryl Roberts. The Victoria-Tasmania general manager, Andrew Harris, and another senior executive, Walter Gross, departed almost immediately last month.
A former Amcor executive said the latest redundancies were aimed at lowering costs to a level that would eventually determine the shareholdings of both Amcor and Carter Holt in the joint venture. "Hart looks like he is going to take management control of it," the executive said.
The deal, expected within months, will raise concerns about a duopoly in Australia's $A2.2 billion cardboard box market, which is still reeling from the record $A36 million fine imposed on Mr Pratt and Visy for a price-fixing cartel with Amcor. The former Amcor executive claims the Australian Competition and Consumer Commission has given tentative approval to an Amcor-Carter Holt joint venture.
Mr Hart has gone on a spending spree since taking full control of Carter Holt early last year for $NZ3.3 billion, buying Swiss packaging giant SIG, Blue Ridge Paper Products of the US and beverage packaging assets from International Paper. But New Zealand's richest man will still have an estimated $A2.5 billion-plus to spend after selling a 20 per cent stake in Goodman Fielder in October and from a yet-to-be completed auction of Carter Holt's timber products business.
"They may be looking at it," another Amcor executive said late last week of Mr Hart's intentions for Amcor. "There's a rumour about Carter Holt Harvey every week - Graeme Hart has run the ruler over Amcor." Amcor executives will brief investors in Sydney on Tuesday next week about the overall business.
A New Zealander, Greg Beatty, the former boss of Fonterra Australasia, took over as Amcor Australasia's managing director in October from Louis Lachal, a 27-year veteran of the company who will retire next year. Also departing Amcor Australasia are Melanie Huson, the human resources chief who leaves next week, and another executive, Shay McQuade. Before Mr Hart took over Carter Holt, the company is understood to have offered the Amcor board about $A1.3 billion for its fibre packaging business about three years ago. Sources say Mr Hart has since made several approaches to Amcor for the business, to no avail.
Carter Holt is the third-largest cardboard box company in Australia behind Richard Pratt's Visy Packaging - which has about 47 per cent of the market - and Amcor (less than 40 per cent). Between them, the three control the cardboard box markets on both sides of the Tasman. Amcor's cardboard box businesses in Australia and New Zealand have struggled from a lack of investment.
