The Commerce Commission today cleared New Zealand Post Limited to acquire the Express Freight Services businesses of Freightways Limited, subject to NZ Post divesting assets.

Commission Chairman Dr Alan Bollard said that the Commission was satisfied that, should the acquisition go ahead, NZ Post would not acquire or strengthen a dominant position in any market.

The Commission considered that seven national and regional freight and courier markets were relevant to NZ Post's application for clearance.

The proposed acquisition would result in NZ Post being the largest provider of parcel delivery services across the range of local and national parcel delivery markets.

However, strong competition would remain from the large number of existing competitors. The Commission was satisfied that existing competitors could expand, and new ones could enter the markets, if NZ Post increased its prices or reduced its services.

In one market, that for national overnight parcel delivery, NZ Post and Freightways are the only two competitors with comprehensive distribution networks.

However, other companies with smaller networks compete in this market, and it is already common for customers to have contracts with several courier or freight firms so that they can compare prices and services. Air New Zealand and Ansett operate in this market, and it is feasible for them to expand their current operations.

The Commission had no significant concerns about competition in the other relevant markets.

The seven markets considered relevant by the Commission were those for:

· national line haul;

· national contracting distribution/logistics;

· Auckland, Wellington and Christchurch intra-city urgent parcel delivery;

· national same day parcel delivery;

· local same day parcel delivery;

· national overnight parcel delivery; and

· national two to three days parcel delivery.

Freightways Express Freight services businesses comprise:

· New Zealand Couriers Limited (100 percent shareholding);

· Post Haste Limited (100 percent shareholding);

· Castle Parcels Limited (100 percent shareholding);

· Messenger Services Limited (100 percent shareholding);

· Stocklink Distribution Limited (100 percent shareholding);

· Parceline Express Limited (100 percent shareholding);

· Freightways Properties Limited (100 percent shareholding);

· Freightways Information Services Limited (100 percent shareholding);

· New Zealand Document Exchange Limited (100 percent shareholding) to be divested; and

· Air Freight NZ Limited (23 percent shareholding).

Media contact: Commerce Act Manager Jo Bransgrove

Phone work (04) 498 0958, home (04) 475 9000

Communications Officer Vincent Cholewa

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