Sky TV and Vodafone NZ merger blocked by Commerce Commission

Sky TV shares were under pressure in early NZ trading today

The New Zealand Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand.

Sky TV shares were under pressure in early NZ trading today after the decision was announced.

The Commission’s assessment focused on the impact of the proposed merger on competition in both the broadband and mobile telecommunications markets. To grant clearance, the Commission said it would need to be satisfied that the proposed merger would not be likely to substantially lessen competition in any market in New Zealand.

Commission chair Dr Mark Berry said the Commission outlined its concerns with the proposed merger in a Letter of Unresolved Issues in October last year and subsequent submissions had not resolved these concerns. As a result, the Commission had not been able to exclude the real chance that the merger would substantially lessen competition.

“The proposed merger would have created a strong vertically integrated pay-TV and full service telecommunications provider in New Zealand owning all premium sports content. We acknowledge that this could result in more attractive offers for Sky combined with broadband and/or mobile being available to consumers in the immediate future. However, we have to take into account the impact of a merger over time, and uncertainty as to how this dynamic market will evolve is relevant to our assessment,” Dr Berry said.

Read the Commission’s report here.

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