A Transpaco production line. The company's proposed acquisition of Premier Plastics had provided great potential for it to grow the business, but the Competition Commission objected.
Image: Supplied
JSE-listed Transpaco’s planned R128 million acquisition of Premier Plastics has been blocked by the Competition Commission.
The South African maker of plastic and paper products said Wednesday that the Commission has prohibited the acquisition, and Transpaco is working through the Commission's response and considering all available options.
The Commission believed the deal would substantially lessen competition in the retail packaging sector - absorbing Premier Plastics would have given it a dominant position in supplying carrier bags and related packaging products. The deal was also seen as potentially harmful to smaller retailers and consumers, an online search showed.
At the end of January, Transpaco had alerted shareholders that the deal to acquire all of the shares in Premier Plastics would, following a due diligence investigation, no longer include the shares of Polyethylene Recoveries, an owned subsidiary of Premier Plastics.
Premier's manufacturing facility in Tshwane produces retail plastic bags from both virgin and recycled raw materials. Polyethylene Recoveries operates as a recycler of various plastic materials and a supplier of recycled High Density Polyethylene and Low Density Polyethylene polymer raw materials for the production of retail carrier bags, refuse bags, and other plastic products.
For Transpaco, the deal presented an opportunity to broaden its market presence, particularly in the retail and wholesale customer sectors. “Premier's business model closely aligns with that of Transpaco. Consequently, the acquisition is anticipated to result in an enhanced ability to effectively serve customers,” the group said at the time.
In the six months to December 31, 2025, Transpaco’s headline earnings fell by 6% to 253,6 cents a share. Its management said that the current economic conditions continued to constrain revenue growth, which reduced by 1,5% to R1,315 million.
For the year to June 30, 2025, Premier generated R503 million turnover and a net profit after tax of R16.8m.
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