The Commerce Commission is investigating a business acquisition that will effectively result in there being only one sugar refiner and distributor in New Zealand.

Commission Chairman Dr Alan Bollard said that the Commission yesterday finalised a Deed that prevents the two companies, Chelsea Investments and Mackay Refined Sugars New Zealand (MRSNZ), intermingling the assets of MRSNZ in such a way that a court could not effectively order divestiture.

The Deed will remain in force until the Commission concludes its investigation with either a decision to take no further action, or until after any possible court action it might take is resolved.

The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any market.

Dr Bollard said the Commission has not yet decided if, in its view, the acquisition would result in dominance. Factors that may constrain the merged entity and prevent it acquiring dominance include, for example, the possibility of overseas sugar distributors entering the New Zealand market or a new company being set up in New Zealand.

"We have done a considerable amount of preliminary work on this matter already," Dr Bollard said, "and we hope to have the investigation finished as soon as practicable."

The New Zealand acquisition is the result of a complex series of transactions involving the Australian parent companies.

Chelsea Investments owns this country's only sugar refinery, and distributes industrial sugar and the "Chelsea" brand of retail sugar. MRSNZ distributes sugar imported from Australia to industrial users and to Kerry (New Zealand) Ltd which supplies retailers.

Media contact: Commerce Act Manager Jo Bransgrove

Phone work (04) 498 0958, home (04) 475 9000

Communications Officer Vincent Cholewa

Phone work (04) 498 0920, home (04) 479 1432