Commerce Commission investigates 26 business acquisitions because of dominance concerns
Published31 Jul 1996
In the quarter ended June 30, the Commerce Commission's surveillance identified 92 business acquisitions of which it had not been notified.
It investigated 26 because they may have raised concerns under the Commerce Act.
The Commerce Act prohibits business acquisitions that would result in dominance being acquired or strengthened. Most acquisitions identified do not require further action, but those which might raise dominance concerns are investigated.
Of the 26 investigations, six are continuing as a watching brief because the parties are still negotiating, four ended when parties applied to the Commission for clearance, one ended when the acquisition did not proceed, 13 ended with a decision that were no concerns under the Act and two are still in preliminary stages.
Commission Chairman Dr Alan Bollard said the Commission has a business acquisition surveillance programme to screen acquisitions which are proposed or which go ahead without application for clearance or authorisation.
The Act allows for clearance and authorisation of business acquisitions that have not yet occurred.
"If people are concerned about how the Act relates to an acquisition they are considering, then they should talk to the Commission before going ahead with it," Dr Bollard said. "We cannot clear or authorise an acquisition after it has gone ahead, we could only investigate it for a possible breach of the Act.
"If there is a concern, the parties may be able to restructure the acquisition to address the problem before the acquisition goes ahead."
A clearance is granted if the Commission is satisfied an acquisition does not result in dominance being acquired or strengthened. In the last quarter it received 11 applications for clearances, all of which it granted.
An otherwise prohibited acquisition can still be authorised if the Commission is satisfied that public benefits outweigh detriments to competition. No authorisation applications were received last quarter.
If granted, both clearance and authorisation protect the acquisition from being challenged in court under the Commerce Act.
Media contact: Chief Investigator Business Acquisitions John Preston
