Vector cleared to buy Meridian's Arc metering business
Vector, the Auckland electricity and telecommunications lines company, has been cleared to by Meridian Energy's Arc Innovations metering business.
The Commerce Commission yesterday gave the green light to the acquisition, which gives Vector advanced electricity meters and related metering services to energy retailers, it said in a statement. Arc missed out on winning any contracts with the major retailers, who have either concluded or are in the process of wrapping up long-term supply contracts, with Vector and MightyRiverPower subsidiary Metrix the successful bidders.
"We consider that if the acquisition proceeds, as the next bidding round, Vector and Metrix are unlikely to have any significant competitive advantage over other parties willing to bid," commission chair Mark Berry said. "This is because the commission expects that there will be changes in meter technology in the meantime, which may induce other parties to submit bids when the current contracts expire."
Vector will take over 135,000 customer connections, mainly in Canterbury and Hawkes Bay as well as Meridian's contracts to provide smart metering services to all major retailers.
Shares of Vector rose 1.8 percent to $2.85 yesterday, and have gained 11 percent this year.
Meridian said the exit means it can "focus on its core strategy of improving customer experience as a nationwide retailer of electricity."
The company's installment receipts were unchanged at $1.69 yesterday, and have climbed 66 percent this year.