NEW ZEALAND Law and Practice Contributed by: Sarah Keene, Jordan Cox, Antonia Horrocks and Victoria Fowler, Webb Henderson
1. Legislation and Enforcing Authorities 1.1 Merger Control Legislation The merger control legislation in New Zealand is the Commerce Act 1986 (“Commerce Act”). The New Zealand Commerce Commission (NZCC) is the regu - lator in New Zealand, and has published process and analytical guidance documents, including Merger and Acquisitions Guidelines and the Merger Applica - tion Form. Decisions can be appealed to the courts, whose judgments also provide guidance on applica - tion of the legislation. There are proposals before Parliament to reform the Commerce Act to provide the NZCC with powers to accept behavioural undertakings, consider creeping acquisitions over a three-year period, call-in non- notified mergers and require parties to hold separate pending the outcome of the NZCC merger review, as well as introducing new statutory 140–160 working day review periods for notified mergers. These reforms are proposed to come into effect six months after the changes receive Royal Assent, but no date is yet set and the proposals may change as the Bill proceeds. Assuming an earliest implementation date of 1 March 2027, this guide describes proposed changes in rela - tion to specific questions and recommends checking the status of the amendments if relying on these parts of the guide after March 2027. 1.2 Legislation Relating to Particular Sectors The foreign direct investment screening regime in New Zealand is governed by the Overseas Investment Act 2005 (OIA). The Overseas Investment Office (OIO) is the regulator responsible for the administration of the OIA. A transaction may require consent from the OIO if an overseas person or associate directly or indirectly acquires an ownership or control interest in: • significant business assets in New Zealand with a value over NZD100 million (higher thresholds are available in some circumstances); • “sensitive land”; or • a fishing quota. The OIA also provides for the review of transactions that could pose significant national security and public order risks.
There is no other relevant legislation for foreign trans - actions or investments. 1.3 Enforcement Authorities The NZCC enforces the Commerce Act. It is respon - sible for enforcing the merger control provisions in the Commerce Act, which includes determining applica - tions for clearance or authorisation of mergers. If par - ties choose not to notify when their transaction could result in a substantial lessening of competition in any relevant market (no matter how small), the NZCC can bring proceedings in the High Court of New Zealand. Only the High Court has the authority to make an order prohibiting a merger from proceeding or any other order necessary to maintain or restore competition. The High Court can also award penalties on applica - tion by the NZCC to deter anti-competitive mergers and award damages to compensate affected parties. Third parties affected by an anti-competitive merger can also bring a private action for damages in the High Court. There is no statutory requirement to seek clearance or authorisation for a proposed merger – filing is volun - tary. However, mergers that substantially lessen com - petition are illegal under the Commerce Act unless the merger has been granted clearance or authorised by the NZCC. The NZCC will seek an interim injunction, through the High Court, if it is of the view that a merger is likely to breach the Commerce Act. The NZCC has published concentration indicators to provide some guidance as to when it will be important for merging parties to consider whether notification is appropriate. These are: 2. Jurisdiction 2.1 Notification • in a concentrated market (where the top three firms post-merger have more than 70% market share) the merged entity cannot have more than 20% share post-merger; or • in a non-concentrated market, the merged entity cannot have more than 40% market share post- merger.
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