The Commerce Commission today cleared Lion Nathan Limited to acquire all the shares in Montana Group (NZ) Limited that it does not currently own.
Lion Nathan currently holds 28.2 percent of Montana.
Commission Chair John Belgrave said that the Commission was satisfied that, should the proposed acquisition go ahead, Lion Nathan would not acquire or strengthen dominance in any market.
Lion Nathan operates in various wine, beer and spirits markets, while Montana operates in several wine markets.
The only markets in which there would be aggregation of market share would be the national markets for:
production or importation of white wine for distribution
production or importation of red wine for distribution
production or importation of sparkling wine for distribution, and
distribution of wine.
Mr Belgrave said that Lion Nathan has low market share in each of these markets and there would be very little aggregation. It is not likely, therefore, that dominance would be acquired in any markets through aggregation alone.
Some businesses told the Commission that they were concerned about the bringing together of Lion Nathan's significant interests in beer and spirits markets, with Montana's significant interests in wine markets.
The Commission took these concerns into account but concluded that the extent of competition that would remain in each market, the wide range of outlets available and the strong buying power of supermarkets would constrain a merged Lion Nathan/Montana.
"Taking all these factors into account, we are satisfied that the proposal would not, or would not be likely to result, in Lion Nathan acquiring or strengthening a dominant position in any market," Mr Belgrave said.
Further details will be available when public copies of the Commission's full decision are released early next week. The decision will be available on the Commission's website, www.comcom.govt.nz, and in hard copy.
Background
The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any market. Parties can apply for a clearance, which the Commission will give if it is satisfied that dominance is not acquired or strengthened.
