The Court of Appeal today unanimously upheld the decision of the Commerce Commission to clear Mercury Energy Ltd to acquire up to 100 percent of the shares of Power New Zealand Ltd.
"This decision is significant for the whole electricity industry," Commission Chairman Dr Alan Bollard said. "It gives strong support to the way the Commission views business acquisitions in this industry."
The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any markets. The Commission will grant a clearance if it is satisfied that dominance is not acquired or strengthened.
Mercury applied to the Commission for clearance in 1994, it was granted, and Power NZ appealed to the High Court. The High Court rejected the appeal and complemented the Commission on the amount of material it had gathered and on its report based on that material.
Power NZ then appealed to the Court of Appeal, and today the five Court of Appeal Judges rejected that appeal.
"This case involves complex economic and legal issues in highly technical markets," Dr Bollard said.
"The Commission did considerable work with the industry before it was deregulated - visiting every power company and publishing discussion and policy papers - to ensure it and the industry were as well informed as possible.
"Close contact was maintained with the industry after deregulation to ensure the Commission keeps up with the changes brought about by competition.
"We have built up considerable knowledge and experience in the electricity industry, and now the Court of Appeal has upheld our approach and views."
Copies of the 16 page Court of Appeal decision are available from the Commission.
Media contact: Chief Investigator Network Industries Unit David Taylor
