Vector granted clearance to acquire Arc from Meridian

The Commerce Commission has granted clearance to Vector Limited (Vector) to acquire all of the shares in Arc Innovations Limited (Arc) from Meridian Energy Limited.

Vector and Arc provide advanced electricity meters and related metering services to electricity retailers.

All the major electricity retailers have concluded, or are in the process of concluding, long term supply contracts with a preferred metering provider. Arc did not win any of the contracts. The successful bidders were Vector and Metrix Limited, a subsidiary of Mighty River Power. 

Because there will not be any significant degree of competition until the expiry of the present contracts, the Commission focused its investigation on what the conditions for bidding for contracts will be at that time.

“The Commission is satisfied that the proposed acquisition will not have, or would not be likely to have, the effect of substantially lessening competition in either of the metering markets that we analysed in this case,” said Commerce Commission Chairman Dr Mark Berry.

“We consider that if the acquisition proceeds, at the next bidding round, Vector and Metrix are unlikely to have any significant competitive advantage over other parties willing to bid. This is because the Commission expects that there will be changes in meter technology in the meantime, which may induce other parties to submit bids when the current contracts expire.” 

A public version of the written reasons will be available shortly on the Clearances Register.

Background

At present, Arc primarily provides meters and metering services to its electricity retailer parent, Meridian.

Advanced electricity meters, often referred to as smart meters, enable electricity usage to be monitored and recorded remotely.

Advanced electricity metering providers like Vector and Arc perform two main functions for electricity retailers; they provide and install advanced electricity meters, together with the associated telecommunications requirements, and they provide data collection and event services such as remote disconnection.