Regulator issues takeover concerns
The Commerce Commission is “currently not satisfied” the proposed merger between Tourism Holdings Ltd (THL) and ASX-listed Apollo “will not have, or would not be likely to have, the effect of substantially lessening competition” in the Kiwi market.
The regulator expressed its concerns in its latest statement of unresolved issues. Investigations are ongoing and a final decision has yet to be made.
The commission notes concerns the deal could result in “horizontal unilateral effects” resulting from a loss of competition in the motorhome rental-services market in New Zealand.
It is also considering if the takeover might increase the potential for the merged entity and its rivals in that market to co-ordinate their behaviour.
In addition, it has yet to decide whether relevant markets affected by the takeover might extend outside the narrow “supply of motorhome rental services” definition to include campervans as well.
The current market for such rentals is subject to coronavirus-induced “excess capacity”, the regulator notes, so it’s more concerned about competition in the medium term as international tourism comes back and capacity possibly getting more constrained.
The commission says it isn’t satisfied campervans, peer-to-peer rentals, car rental, and hotel-room hire, nor the “countervailing power of wholesalers, travel agents and web consolidators”, would constrain an exercise of power by the merged entity.
