Gull takeover approved

The Commerce Commission has granted clearance for the Astra Energy Group to acquire all shares in GNZ Holdco and all shares in NPD Group Investment, including their subsidiaries.

In reaching its decision, the regulator considered the potential impact of the proposed merger on competition in the retail and wholesale fuel-supply markets.

John Small, the commission’s chair, says a thorough investigation found the deal is unlikely to substantially lessen competition. It had earlier raised provisional concerns.

“Our investigation included looking at the markets in which NPD and Gull operate, and assessing whether there would still be adequate competitive alternatives post-merger to constrain the new company’s ability to raise prices and reduce the quality of service,” explains Small, pictured.

“Following this work, we are satisfied the proposed merger isn’t likely to substantially lessen competition in any market in New Zealand in which the parties compete or are likely to compete in.”

The regulator also considered whether the merger would make it more likely the merged entity and all, or some, of its competitors would co-ordinate their behaviour and exercise collective market power to restrict output or bump up prices. It concluded the proposal wouldn’t change conditions in any relevant market in a way that made co-ordination more likely or sustainable.

Small adds the commission’s investigation indicated the merged entity will be constrained in the retail and wholesale supply of fuel by other competitors, including major and independent fuel suppliers.