Commission grants clearance for the merger of NPD and Gull
The Commerce Commission has granted clearance for Astra Energy Group Limited to acquire all of the shares in GNZ Holdco Limited (including its subsidiaries, Gull) and all of the shares in NPD Group Investments Limited (including its subsidiaries, NPD).
In reaching its decision, the Commission considered the potential impact of the proposed merger on competition in the markets for retail and wholesale supply of fuel.
Commerce Commission Chair Dr John Small says the Commission undertook a thorough investigation into the proposed merger and has found it is unlikely to substantially lessen competition in any New Zealand market. The Commission had earlier raised provisional concerns about the merger.
“Our investigation included looking at the markets within which NPD and Gull currently operate and assessing whether there would still be adequate competitive alternatives post-merger to constrain the new company’s ability to raise prices and reduce the quality of its service,” Dr Small says.
“Following this work, we are satisfied that the proposed merger is not likely to substantially lessen competition in any market in New Zealand in which the parties compete, or are likely to compete in future.”
The Commission also considered whether the proposed merger would make it more likely that the merged entity and all, or some, of its competitors would coordinate their behaviour and exercise their collective market power to restrict output or increase prices. It concluded that the proposed merger would not change conditions in any relevant market in a way that made coordination more likely or sustainable.
Dr Small adds that the Commission’s investigation indicated the merged entity will be constrained in the retail and wholesale supply of fuel by the presence of other competitors, including the majors, as well as independent fuel suppliers.
Full written reasons for the decision will be available on the case register on our website in the coming days.
Background
We will only give clearance to a proposed merger if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.
Further information explaining how the Commission assesses a merger application is available on our website.