The Commerce Commission today cleared Mercury Energy to acquire 100 percent of the shares in Power New Zealand.

Commissioner Terry Stapleton said that the Commission was satisfied that the acquisition would not result in Mercury acquiring or strengthening a dominant position in the relevant electricity markets.

Mercury had applied to the Commission to roll over its earlier clearance to acquire Power New Zealand. That clearance was granted in December 1994. Although it was appealed to both the High Court and the Court of Appeal by Power New Zealand, the clearance was upheld by both courts. That clearance expires on March 3.

In addition, in June 1997 the Commission cleared a Mercury/Utilicorp joint venture to acquire Power New Zealand. Utilicorp has interests in other power companies, and the Commission analysed that application as though Mercury, Power New Zealand, WEL Energy and Bay of Plenty Electricity were all one entity. That clearance expires on June 27.

In accordance with its usual practice, the Commission's clearance today took account of the Mercury/Utilicorp joint venture clearance and any relevant changes and developments since that clearance was given.

Mr Stapleton said that although the acquisition would result in some aggregation in the national retail electricity market, the acquisition would fall within the Commission's "safe harbours" in terms of market share and there would still be other powerful players, as well as minor players, in the market.

The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any markets. Parties can apply to the Commission for clearance, which will be granted if the Commission is satisfied that dominance is not acquired or strengthened.

The Business Acquisitions Guidelines published by the Commission state two safe harbours within which dominance is unlikely to be acquired or strengthened. These are:

? a post acquisition market share of less than 40 percent; and

? a post acquisition market share of less than 60 percent if at least one other competitor has no less than 15 percent of the market.

Media contact: Commerce Act Manager Jo Bransgrove

Phone work (04) 498 0958

Communications officer Vincent Cholewa

Phone work (04) 498 0920

Copies of Commission media releases can be viewed on its web site www.comcom.govt.nz