GWR cleared to buy Radio New Zealand commercial stations subject to divestment
Published21 Mar 1996
The Commerce Commission today cleared GWR Group to acquire all the shares of the Radio Company Ltd (RCL), which owns Radio New Zealand's 41 commercial stations, subject to GWR divesting certain radio frequency licences.
The Government has not yet made a final decision about which of the short-listed bids for RCL will be accepted. The Commission is not managing the sale process for the Government, but is required under the Commerce Act to consider the competition implications of business acquisitions.
Commission Chairman Dr Alan Bollard said in clearing the proposal, the Commission accepted an undertaking that a number of radio frequency licences in Auckland and Hamilton will be divested, if GWR is the successful bidder for RCL.
The Commission will not release details of which licences would be divested, this information is commercially sensitive.
GWR is an English company which, through its ownership of Independent Broadcasting, owns seven radio stations in Auckland, five stations in Hamilton and the IRN News and Sport bulletin service.
Dr Bollard said that with the divestment undertakings the proposed acquisition would not lead to GWR acquiring a dominant position in any market.
The Commission considered the proposal's impact on radio advertising in Auckland, Hamilton, and nationally, and radio news, information and entertainment in Auckland, Hamilton and nationally.
In all markets, existing competition and potential competition from the licences that will be divested will prevent GWR acquiring a dominant position.
Currently there are 157 commercial radio stations operating nationally, of which 41 are owned by RCL and 12 by GWR.
At present GWR owns seven stations in Auckland and RCL owns two. Three other major broadcasting companies operate one station each and several other companies also operate stations.
In Hamilton GWR currently owns five stations and RCL owns two. The major competition is from three other stations, and several smaller stations also operate.
Background
The Commerce Act prohibits business acquisitions which lead to dominance being acquired or strengthened in any market.
Parties can apply to the Commission for a clearance, which will be granted if the Commission is satisfied that dominance is not acquired or strengthened.
Media contact: Communications Officer Vincent Cholewa
