In a decision late last month, Commerce Commission deputy chairwoman Sue Begg said the commission was satisfied merger of the business would not substantially lessen competition in the construction materials supply market.
The MDF (medium-density fibreboard) plant is on State Highway 1 south of Mataura, while Daiken manufactures and supplies MDF from a North Canterbury plant.
Korean-owned Dongwha was 80% owned by Dongwha International Co, a Hong Kong incorporated company, and 20% by Laminex Group, a division of listed Fletcher Building.
Daiken management in North Canterbury did not respond to a request for comment.
Ms Begg said, ``We were satisfied on the evidence before us that the market is currently delivering competitive outcomes and that the proposed acquisition is not likely to substantially change that situation.''
Laminex had bought MDF from Dongwha for its own New Zealand wood products business and also on-sold some of the MDF to other parties.
Daiken's parent company, Daiken Corp, is a Japanese company specialising in the manufacture and supply of wood-based construction materials. Its New Zealand subsidiary produces only MDF.
