Z gets the green light

Z Energy’s application to acquire 100 per cent of the shares in Chevron New Zealand has been cleared by the Commerce Commission. Chevron NZ own the Caltex and Challenge brands in NZ and the clearance is subject to Z Energy divesting 19 retail sites and one truck stop in locations where the Commission considers competition would be substantially reduced as a result of the merger. The Commission considered the supply of fuel to customers and also how the merger would affect competition in upstream markets associated with refinery, distribution and storage. It was satisfied that Chevron’s departure from New Zealand would not substantially lessen competition subject to divestments being undertaken. “Chevron, as supplier to the Caltex and Challenge brands, has been a passive competitor in New Zealand and followed the lead of its rivals rather than taking an aggressive approach in its pricing,” chair Dr Mark Berry said. “We consider, by majority, that subject to Z Energy divesting 19 retail sites Chevron’s absence would not make a material difference to the competitive dynamics we currently see, where retail price movements are dominated by Z, BP, Mobil and Gull.” Z Energy owns and operates a network of just over 200 service stations and sets the retail price at those stations. Chevron supplies around 150 Caltex-branded service stations on a wholesale basis.