Commission imposes conditions on radio acquisition
Published18 Nov 1996
The Commerce Commission has cleared the Radio Network of New Zealand to acquire the Prospect Companies' radio stations in Auckland and Hamilton on the condition that Radio Network sells a significant number of stations in Auckland and Hamilton.
Commission Chairman Dr Alan Bollard said the Commission is satisfied that the divestment of stations and competition from other existing radio companies will prevent Radio Network acquiring or strengthening a dominant position in any market.
Radio Network is the company which bought Radio New Zealand's commercial stations, including two in Auckland and two in Hamilton. It also owns an advertising placement agency, the Radio Bureau.
It was cleared to acquire all the shares of 12 GWR Group Plc subsidiaries, collectively known as the Prospect Companies. The Prospect Companies own seven radio stations in Auckland, five in Hamilton, an outdoor advertising service and the radio news service, IRN News and Sport.
Dr Bollard said the stations to be sold by Radio Network have been specified in the clearance but their identities are commercially sensitive and are being treated as confidential.
In reaching its decision to grant a clearance, the Commission maintained its previous view that radio operates in a series of separate regional markets and that radio, television and print advertising are all separate markets.
In this case, the four relevant markets are those for radio advertising in Auckland and Waikato, and radio news and entertainment in Auckland and Waikato.
The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any market. It allows buyers to apply for clearance, which the Commission will grant if it is satisfied that dominance is not acquired or strengthened.
"The Commission is satisfied that divestment of radio stations and existing competition will prevent Radio Network acquiring a dominant position in the Auckland and Hamilton radio markets," he said.
Media contact: Chief Investigator Business Acquisitions John Preston
