The Commerce Commission today cleared New Zealand Bus Limited, a subsidiary of British company Stagecoach Holdings plc, to acquire Transportation Auckland Corporation Limited.
Transportation Auckland operates under the trade name, The Yellow Bus Company.
Commission Chairman Peter Allport said that the Commission was satisfied that, should the proposed acquisition go ahead, Stagecoach would not acquire or strengthen a dominant position in any markets. The relevant markets in this case are the markets for the:
? provision of scheduled bus passenger services in the greater Auckland metropolitan region; and
? rights to operate commercial and subsidised bus passenger services in the greater Auckland metropolitan region.
Mr Allport said that the Commission made its decision after receiving considerable further information about the regulatory powers of the Auckland Regional Council (ARC).
The proposed acquisition would give Stagecoach about a 90 percent market share, but the ARC's strong statutory powers to regulate the market would constrain Stagecoach and prevent it acquiring or strengthening dominance.
However, the Commission noted that should the market be significantly de-regulated in future, then Stagecoach would almost certainly be dominant.
The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any markets.
Parties can apply for a clearance which will be granted if the Commission is satisfied that dominance is not acquired or strengthened.
A business acquisition that is prohibited because it would result in dominance can still be authorised if the Commission is satisfied that its public benefits outweigh its detriments to competition.
Stagecoach had previously applied for clearance to acquire the Yellow Bus Company but in February the Commission declined to grant it.
In April, Stagecoach applied to the Commission for an authorisation or clearance.
After the second application was made, the Commission received considerable further information about the ARC's powers. That further information led the Commission to review its earlier view and to conclude that the ARC has power strong enough to constrain Stagecoach.
Granting the clearance brings the Commission's process to an end. The draft determination that would have been part of the authorisation process will not be issued and the planned conference will not be held.
Media contact: Communications Officer Vincent Cholewa
Phone work (04) 498 0920
Commission media releases can be viewed on its website www.comcom.govt.nz
A copy of the Commission's decision will be on its website next week.
