The purpose of these Merger and Acquisition Guidelines is to assist parties considering mergers and acquisitions likely to be covered by Part III of the Commerce Act 1986 (the Act), and their advisers.
The Guidelines provide an outline of the broad analytical approach used by the Commerce Commission (the Commission) in applying the substantial lessening of competition test for mergers and acquisitions set out in s 47. For the sake of clarity, these Guidelines focus exclusively on mergers and acquisitions under s 47 (referred to as ‘acquisitions’ throughout the Guidelines), and apply to clearances under both ss 66 and 67.
The test of a substantial lessening of competition also applies to some matters covered by the anti-competitive behaviour provisions under Part II of the Act.
The Guidelines indicate when the Commission is likely to have concerns that an acquisition may contravene the substantial lessening of competition threshold, and thus identify the circumstances when a clearance should be sought. Where a proposed acquisition appears to fall outside the safe harbours, it would be prudent for the parties involved to bring the proposal before the Commission by way of an application for a clearance.
Although these Guidelines indicate how the Commission is likely to interpret and apply the substantial lessening of competition test in most circumstances, they do not cover every issue that may arise under the Act.
This information is not intended to be used as a substitute for legal advice. Businesses contemplating a merger or acquisition are urged to consult their legal advisers.
The Commerce Commission gratefully acknowledges the valuable comments provided by a number of individuals and organisations on previous drafts and on Practice Note 4, which this publication replaces, effective 1 January 2004.
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