Godfrey Hirst says it won't appeal a High Court decision over a proposal to create a wool scouring monopoly in New Zealand.
That leaves the way clear for Cavalier Wool Holdings, to proceed with its plan to buy the assets of Wool Services International, so it can merge the scouring services of two companies.
Cavalier argues that the merger is necessary to keep the process of cleaning greasy wool in New Zealand, in the face of competition from China.
The takeover has been cleared by the Commerce Commission and Godfrey Hirst failed in its High Court action to block the move.
Cavalier is not saying at this stage when it will make the bid for WSI's assets.
Godfrey Hirst says it's concerned that a scouring monopoly could lead to an increase in processing costs here, forcing it and other processors to shift more of their operations off-shore.
General manager Tania Pauling says the carpet maker is waiting to see what will happen next.
Godfrey Hirst lost a significant part of its domestic yarn processing capacity with closure of its factory in Christchurch, due to earthquake
MS Pauling says yarn imported from China and India will be used to supplement, not replace production at its remaining domestic yarn plants in Dannevirke and Lower Hutt.
But she says it's likely that if the carpet market picks up again, the extra wool needed by her company would not come from New Zealand.