Commission clears Reindeer to acquire 51 percent of Harding
Published18 Aug 2000
The Commerce Commission has cleared Reindeer Investments Pty Limited to acquire 51 percent of Harding Licensing Systems Limited.
Commission Chair John Belgrave said that the Commission was satisfied that Reindeer would not acquire or strengthen dominance in any market. In this case, the relevant market is that for the manufacture and distribution of vehicle registration plates and the provision of associated services.
Currently, Harding is the only supplier of motor vehicle registration plates in New Zealand, while Reindeer makes motor vehicle registration plates in Australia.
The New Zealand market is regulated by laws administered by the Land Transport Safety Authority (LTSA). By law, the LTSA is the only purchaser it calls for tenders every three to five years.
The Commission identified several potential entrants to the market, including Roadsigns and Traffic Control Equipment Limited, Altona Industries Pty Limited and the Corrections Department.
The Commission was satisfied that the LTSA's considerable buying power as the only purchaser, together with the ability of other businesses to enter the market, would prevent a combined Reindeer/Harding using its market power to raise prices or reduce quality.
Reindeer is an Australian-based holding company whose subsidiaries manufacture vehicle registration plates and traffic safety products.
Harding produces vehicle registration plates, security identification systems and digital graphics on vinyl sheeting.
Harding will be created for this acquisition and will own assets currently owned by Harding Electronic Systems Limited (HES). HES is ultimately owned by Viking Pacific Holdings Limited.
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 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.
Public copies of the Commission's decision will soon be on its website, www.comcom.govt.nz and are available from reception at its Wellington office, level 7 Landcorp House, 101 Lambton Quay.
