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Companies submit merger application to New Zealand’s competition body.
New Zealand’s Commerce Commission on Thursday revealed that it has received merger clearance applications from both Vodafone’s local unit and Sky Network Television, which announced their decision to combine their businesses earlier this month.
"The proposed transaction will not result in any substantial lessening of competition," in the residential fixed broadband or pay TV sectors, or in any other markets, the companies said in their applications.
Both pointed out that the broadband market in New Zealand is already "extremely competitive" with a growing number of service providers to choose from. The regulatory climate and structural separation of the incumbent means low barriers to entry, they said.
Meanwhile, they pointed to growing competition in the pay TV space, with many providers offering a range of content packages.
"In summary, the combined group will face strong and growing competition across pay-TV, premium content, and telecommunications markets," the firms said.
"Consumers’ viewing behaviours and the relevant markets are changing rapidly, and consumers’ expectations of their telecommunications and pay-TV providers are ever increasing," they said, adding that the documents they have submitted to the Commerce Commission show that "there is no prospect of a combined Vodafone and Sky pursuing any credible foreclosure strategy or otherwise reducing competition."
Under the terms of the proposed deal, Sky will acquire 100% of Vodafone New Zealand via the issue of new shares that will then give Vodafone a 51% stake in Sky plus NZ1.25 billion in cash. In total, the deal is valued at NZ$3.44 billion (€2.16 billion).
"While we have received two separate applications for clearance (for the two separate acquisitions), the Commission is considering the applications together," the regulator said.
It has not yet published a deadline date for reaching a decision.
