LONDON (dpa-AFX) - The New Zealand Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand.
The Commission's Chair Mark Berry said the Commission outlined its concerns with the proposed merger in a Letter of Unresolved Issues in October last year and subsequent submissions had not resolved these concerns. As a result, the Commission had not been able to exclude the real chance that the merger would substantially lessen competition. 'The proposed merger would have created a strong vertically integrated pay-TV and full service telecommunications provider in New Zealand owning all premium sports content. We acknowledge that this could result in more attractive offers for Sky combined with broadband and/or mobile being available to consumers in the immediate future. However, we have to take into account the impact of a merger over time, and uncertainty as to how this dynamic market will evolve is relevant to our assessment,' Berry said. '...Given the merged entity's ability to leverage its premium live sports content, we cannot rule out the real chance that demand for its offers would attract a large number of non-Vodafone customers.......Given we are not satisfied that we can say that competition is unlikely to be substantially lessened by the proposed merger, we must decline clearance ,'Berry said.
In June 2016, Sky Network Television Limited (SKT.NZ, SKT.AX)and Vodafone Group Plc. (VOD.L, VOD) announced that they reached an agreement to create a leading integrated telecommunications and media group in New Zealand, via a combination of SKY and Vodafone New Zealand Limited.
SKY would acquire all of the shares in Vodafone NZ for a total purchase price of NZ$3.437 billion, through the issue of new SKY shares giving Vodafone Europe B.V. a 51% interest in the Combined Group and cash consideration of NZ$1.250 billion, to be funded through new debt.
The new SKY shares would be issued at a price of NZ$5.40 per share, representing a 21% premium to SKY's last close of $4.47 and 27% premium to SKY's 1 month VWAP of $4.25 on 7 June 2016.
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