NZME and Fairfax NZ Merger: NZCC Draft Determination Issued

8 November 2016:

As part of the New Zealand Commerce Commission (“NZCC”) process for approval of the proposed merger between NZME Limited (NZX:NZM, ASX:NZM) (“NZME”) and the New Zealand subsidiary of Fairfax Media Limited (ASX:FJX) (“Fairfax New Zealand”), the NZCC today published a Draft Determination setting out its preliminary view as to whether it is likely to grant authorisation to the proposed merger. The NZCC's preliminary view is that, based on information it has received to date, it should decline the proposed merger between NZME and Fairfax New Zealand. 

The Commerce Act requires the NZCC to assess whether the public benefits outweigh detriments to competition. In this case, the NZCC has concluded, based on its standard test, that the public benefits arising from the merger outweigh quantified detriments. The NZCC has then indicated that its preliminary view is that it will decline the merger due to unquantified concerns relating to plurality of media. The parties' view is that the NZCC has failed to properly take into account the diversity of opinions that will continue post-transaction in an increasingly converged digital world. The parties will be discussing this point further with the NZCC, including making further written submissions and submitting through the NZCC's conference process. 

The purpose of the Draft Determination is to elicit further submissions and evidence to assist the NZCC in making a final determination, and today's Draft Determination demonstrates that the NZCC is taking an appropriately thorough approach to considering the proposed merger. The Draft Determination will be available on the NZCC’s website at:

NZME and Fairfax New Zealand will now take time to review the Draft Determination in detail and provide further information to the NZCC to assist in working through its consideration of the issues that have been identified on a preliminary basis. 

The NZCC are seeking submissions by 22 November 2016 and have currently scheduled a conference for three days in Wellington: Tuesday 6 – Thursday 8 December 2016. This is where the Commissioners considering the proposed merger will question NZME, Fairfax and other interested parties on areas they need more information about before making their final decision. 

A final NZCC determination is currently expected on or before 15 March 2017. 

The merger remains conditional on NZME shareholder and NZCC approval, among other matters.