Regulator approves takeover

The Commerce Commission has granted clearance to Eroad Ltd to acquire all of the shares in Coretex.

The two companies provide vehicle telematic solutions to customers in New Zealand, Australia and the US. 

Their systems allow commercial fleet owners to analyse and manage how their vehicles and drivers are performing, and can help them meet statutory requirements such as paying road-user charges (RUC).

In its statement of issues from October, the commission raised preliminary concerns the acquisition would substantially lessen competition for the supply of telematic solutions to customers that include an electronic RUC system, which automates the calculation and payment, and displays the licence digitally inside the vehicle.

Commissioner Dr Derek Johnston says the regulator is now satisfied the proposed acquisition is unlikely to substantially lessen competition in any New Zealand market.

“A key focus for us was whether Coretex could become a stronger competitor absent the proposed acquisition,” says Johnston. “Evidence that we received since our statement of issues, however, showed that this was unlikely.

“We also found the merged entity is likely to face competition from rival suppliers of telematic solutions, which include eRUC systems and, for some customers, from suppliers of telematic solutions that include ‘electronically assisted’ RUC systems. These perform many of the same functions as eRUC systems.

“In light of this, we are satisfied the proposed acquisition would not have a significant detrimental effect on competition when compared with what would likely happen if the merger didn’t proceed.”