The Commerce Commission today cleared Massey University to acquire the assets and businesses of the Auckland College of Education.

Commissioner Cathie Harrison said that the Commission was satisfied that, should the acquisition go ahead, Massey University would not acquire or strengthen a dominant position in any market. In this case, the markets examined were those in greater Auckland and Northland for provision of programmes of study leading to:

? primary school teaching qualifications;

? secondary school teaching qualifications; and

? in-service teaching qualifications.

In each of these markets the combined entity would have a market share greater than the "safe harbours" published by the Commission in its Business Acquisitions Guidelines.

The safe harbours are up to 40 percent market share, or up to 60 percent market share if at least one competitor has 15 percent or more of the market.

The Commission concluded that existing competitors in the markets in question, particularly the University of Auckland, would exercise a sufficient constraint on the combined entity. Further, new entry to these markets is possible and existing competitors can expand their operations. The Commission concluded that for these reasons the combined entity, despite its large market share, would not acquire or strenghten dominance in these markets.

Background

This was the first time the Commission had received an application for clearance from an organisation in the public education sector. When the possibility of public sector education mergers arose some time ago the Commission looked at how, or if, the Commerce Act applied to them. The Commission's view is that organisations in the public education sector are not exempt from the Act.

The 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 grant if it is satisfied that dominance is not likely to be acquired or strengthened. A clearance, if granted, protects an acquisition from court action under the Act.

Media contact: Commerce Act Manager Geoff Thorn

Phone work (04) 498 0958

Communications Officer Vincent Cholewa

Phone work (04) 498 0920

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