Watchdog approves merger deal
The Commerce Commission has granted clearance for Tourism Holdings Ltd (THL) to acquire all of the shares in Australian operator Apollo Tourism & Leisure Limited after the companies agreed to sell some assets.
The regulator was concerned the proposed merger would hurt market competition but is now satisfied the asset divestment means there will not be a substantial reduction in the level of competition.
It has given its approval to the deal subject to an undertaking from THL and Apollo to divest 110 of Apollo’s existing four to six-berth motorhome rental fleet in New Zealand, Apollo’s Star RV brand, forward motorhome rental bookings, the lease to an existing Apollo depot and other assets to a subsidiary of Jucy Group.
The parties have also entered into related arrangements where an Apollo entity will provide certain services to Jucy on a transitional basis, and the merged company will supply 40 motorhomes in 2023 with an option for an additional supply or procurement of a further 40 motorhomes in 2024.
Sue Begg, deputy chair of the commission, says its statement of unresolved issues in April raised concerns the proposed acquisition, absent the divestment undertaking, would be likely to substantially lessen competition in the supply of motorhome rental services.
“The proposed acquisition would have resulted in THL increasing its already significant position in motorhome rentals, particularly in the four to six-berth motorhome segment of the national market for RV rentals,” she explains.
“We were concerned that other competitors or potential entrants would not provide enough competition to prevent THL from raising prices or decreasing quality.”
Begg adds the sale of motorhomes, the Star RV brand and other assets to Jucy, combined with the related arrangements, satisfied the commission the proposed acquisition is unlikely to substantially lessen competition.
The application from THL seeking clearance to acquire 100 per cent of the shares in Apollo was lodged in December last year.
Grant Webster, pictured, THL chief executive, says he is pleased the company has now received the commission’s clearance and hopes the merger will get all regulatory approvals by the end of November.
