The Commerce Commission today cleared News Corporation to acquire up to 100% of Ansett New Zealand and also cleared Air New Zealand to acquire 50% of Ansett Holdings, subject to News and Air New Zealand undertaking to dispose of all of the assets and shares owned and held by Ansett Australia Holdings in Ansett New Zealand.

Commission Chairman Dr Alan Bollard said that in clearing the separate but interrelated acquisitions, the Commission accepted undertakings from News and Air New Zealand as the future equal shareholders of Ansett Holdings, to dispose of all of the assets and shares of Ansett New Zealand within one working day of Air New Zealand acquiring 50% of Ansett Holdings.

Dr Bollard said that with the implementation of the undertakings, Air New Zealand would have no ability to exert any influence over Ansett New Zealand and therefore would not acquire or strengthen a dominant position in the New Zealand air transport markets.

The Commission previously declined an application by Air New Zealand for authorisation to acquire up to 50% shareholding in Ansett Holdings. The Commission had concluded that it could not accept a proposed joint venture structure which was intended to prevent Air New Zealand being in a position to exercise a substantial degree of influence over Ansett New Zealand. This had led to the Commission finding that the two airlines would be associated and together would be in a dominant position in the New Zealand domestic passenger air services markets.

Dr Bollard said that in considering the current notices seeking clearances, the Commission focused on whether Air New Zealand would be in a position to exercise a substantial degree of influence over the activities of Ansett New Zealand. The Commission concluded that, on the basis that News would own 100% of Ansett New Zealand, Air New Zealand would not be able to exercise a substantial degree of influence over the activities of Ansett New Zealand.

Consequently, the two airlines would not be associated persons and issues of dominance in the New Zealand air transport market did not arise.

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 clearance, which will be granted if the Commission is satisfied that a dominant position is not acquired or strengthened.

Copies of the Commission's report are available from reception, 7 floor, Landcorp House, 101 Lambton Quay, Wellington.

Media contact: Communications Officer Vincent Cholewa

Phone work (04) 498 0920, home (04) 479 1432