Infratil seeks clearance to acquire up to 50% stake in Vodafone NZ
The Commerce Commission has received a clearance application from Infratil seeking clearance to acquire up to a to 50% interest in Vodafone New Zealand. Brookfield Asset Management Inc will acquire the other 50% share of Vodafone.
Vodafone is a telecommunications company which offers fixed, mobile and content/TV services. Vodafone is owned by Vodafone BV, which is a Netherlands-incorporated company.
Infratil is an NZX listed infrastructure investment company. It mainly invests in energy, transport and infrastructure businesses in New Zealand, Australia and the United States.
It owns approximately 51% of the shares of Trustpower Limited (Trustpower). Trustpower is a power company that also sells telecommunication services.
Brookfield Asset Management is a global infrastructure investment company.
In New Zealand, Infratil (through Trustpower) and Vodafone overlap in the supply of telecommunication services to residential and business customers.
A public version of the clearance application will be available on the Commission’s case register shortly.
The commission will give clearance to a proposed merger if they are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.
The Commission administers a voluntary clearance regime for mergers and acquisitions but can also take enforcement action to prevent anti-competitive transactions from going ahead if prior clearance is not sought.
When considering a proposed merger, they can only give clearance if they are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.
They assess mergers using the substantial lessening of competition test. This test examines whether a merger is likely to substantially lessen competition in a market, by comparing the likely state of competition if the merger proceeds with the likely state of competition if the merger does not proceed.
A lessening of competition is generally the same as an increase in market power, which is the ability to raise prices and reduce the quality of goods and services that would exist if there was a competitive market.