|Australia's second and third biggest printers will merge to form a company worth more than $700m, Blue Star and IPMG representatives confirmed to ProPrint this week.
The two companies have entered into a heads of agreement to merge their printing operations, in a deal that will bring together senior management from both businesses.
The merger will see the combined entity leapfrog PMP - whose revenue dipped below $1bn last financial year - as the country's biggest printer. The new company will have major operations along the eastern seaboard, with huge web printing capacity, a major sheetfed operation, digital printing and Blue Star's new augmented reality division.
It includes the new $130m IPMG Warwick Farm web offset facility opened just a year ago.
IPMG's non-print businesses, such as digital and property holdings, will not be part of the merged company and will remain wholly owned by the Hannan family.
Blue Star managing director Geoff Selig says the merged company will be a 50/50 split between IPMG and Blue Star. He says leadership, management structure and a name for the group are still to be worked out.
"IPMG operate through various brands like Hannan Print, while we tend to keep ours consistent, so we will see how that ends up working out," he said.
He says, at this point, the plan is for operations of both companies to continue as usual with all plants remaining open and all staff retained.
However, IPMG executive chairman Michael Hannan there is likely to be staff and equipment rationalisations at some point, particularly the phasing out of numerous old machines owned by both firms.
"There is significant overcapacity in the industry and inevitably when you become more efficient in a merger like this you need to lose staff and equipment, but I'm a big believer in doing this by natural attrition and using redundancies only as a last resort," he says.
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