Commission clears NGC to acquire TransAlta subject to divestment
Published17 Mar 2000
The Commerce Commission today cleared Natural Gas Corporation Holdings Limited (NGC) to acquire a 75.8% shareholding in TransAlta New Zealand Limited, subject to NGC's parent company, The Australian Gas Light Company (AGL), divesting its gas distribution system in the Hutt Valley and Porirua area (Hutt/Mana), by 1 October 2001.
Commission Chair John Belgrave said that the Commission was satisfied that, should the acquisition go ahead with the divestment of the gas distribution system, TransAlta's dominant position in the market for the retailing of gas to domestic users in the Hutt/Mana area would not be strengthened.
The divestment undertaking provides that AGL is not required to divest the gas network if TransAlta sells its residential gas business or at least 50% of its residential gas customers. This option would also address any dominance concerns in the market for the retailing of gas to domestic users in the Hutt/Mana area.
The Commission was satisfied that dominance would not be acquired or strengthened in the following markets:
The national electricity generation and wholesaling market
The national electricity retail market
The North Island market for the retailing of gas to industrial and commercial users.
The Commission was also satisfied that, with the divestment, there would be no strengthening of NGC's existing dominance in the market for the transmission of gas in the North Island, nor of AGL's existing dominance in the Hutt/Mana gas distribution market.
Public copies of the decision, detailing the reasons for granting clearance, will be available next week.
Background
The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any markets.
Parties can apply for a clearance, which the Commission will grant if it is satisfied that dominance is not acquired or strengthened. A clearance, if granted, protects an acquisition from court action under the Act.
