The Radio Network denied clearance to acquire Fifeshire
Published04 Oct 1996
The Commerce Commission has today declined to clear The Radio Network of New Zealand Limited to acquire all of the shares in Fifeshire FM Broadcasters Limited.
Commission Chairman Dr Alan Bollard said that the Commission was not satisfied that the proposal would not result in the acquisition of a dominant position in the market for radio advertising services in Nelson.
The proposal involved The Radio Network acquiring all of the radio stations and frequencies owned by Fifeshire in Nelson, Westport and Picton.
The Radio Network already operates in these market. If the acquisition had proceeded, Radio Network would control 99 percent of the Nelson radio advertising market.
Dr Bollard said the Commission concluded that existing customers and remaining competitors would not constrain the merged company.
The Commission considers that while new entry into the Nelson radio advertising market is technically possible, it is not satisfied that new entry is commercially viable or likely.
The Commission also looked at possible competition from other media, including newspapers and television. It concluded that there is little overlap and radio advertising is a separate market from other media.
"Considering the very high market share, the difficulty of new entry and that inter-media competition is minimal, the Commission had no option but to decline the clearance," Dr Bollard said.
The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any market.
A company can apply for clearance of an acquisition. The Commission will grant clearance if it is satisfied that dominance is not acquired or strengthened.
Copies of the Commission's report will be available publicly on Monday.
Media contact: Chief Investigator Commerce Act Geoff Thorn
