NEW ZEALAND Law and Practice Contributed by: Sarah Keene, Jordan Cox, Antonia Horrocks and Victoria Fowler, Webb Henderson
These indicators are not determinative and do not cre - ate any presumptions as to the legality of any arrange - ments. As the appropriate market definition can be uncertain, the NZCC recommends the market defini - tion that results in the highest market share should be adopted for applying the indicators. It will consider the competitive importance of the merging firms when deciding whether it needs to review a transaction and has actively considered a number of purely vertical mergers in the past decade, including prohibitions in two cases. In most situations, parties will apply to the NZCC for clearance if these concentration indicators are met. Parties are also likely to consider whether the transac - tion is taking place within an industry or market that is regarded by the NZCC as sensitive or is politically high-profile, such that it would be more likely to inves - tigate the transaction even where the concentration indicators are not likely to be met. In other circumstances, parties may engage on a courtesy letter basis with the NZCC, which can lead to the NZCC either indicating that a formal process is appropriate, or that it has no further questions so the parties can proceed on the basis the NZCC is unlikely to open an investigation or seek to intervene in completion, in the absence of further information or complaints. Only a formal process can provide statu - tory immunity for a transaction. Proposed changes to the Commerce Act would give the NZCC call-in and hold separate powers. See 2.11 Power of Authorities to Investigate a Transaction , and check the status of these amendments if using this guide after 1 March 2027. 2.2 Failure to Notify As the regime is voluntary, there are no penalties under the Commerce Act for failing to file. However, if the NZCC becomes aware of a transaction that it considers may substantially lessen competition, it can apply to the High Court for an interim injunction to prevent completion, and/or require the companies to be held separate while it investigates.
Mergers that substantially lessen competition, which have not been approved by the NZCC, are illegal and may attract enforcement action by the NZCC or third parties, including declarations of illegality, injunctions, court orders to divest, and damages awards. The NZCC can also obtain pecuniary penalty orders. (See below in relation to maximum penalties.) 2.3 Types of Transactions The merger control provisions of the Commerce Act apply to any acquisition of business assets or shares that confers a substantial degree of influence over an entity, where that level of control is likely to substan - tially lessen competition in any relevant market. The provisions will apply irrespective of whether a minority or majority interest in a business is being acquired. The same test applies – whether the acqui - sition has the effect or likely effect of substantially lessening competition in a market. Interdependent transactions can be the subject of a single clearance application, provided each transac - tion in the series is properly described in the applica - tion. Sequential transactions are assessed separately, although creeping acquisitions can be captured by the NZCC’s enforcement activity due to the low market share increment thresholds in New Zealand. If, in all circumstances, including considering previous acqui - sitions by the same entity, the most recent acquisition in a series would substantially lessen competition in a relevant market, then it can be caught by New Zea - land’s merger control prohibition. There is no specific creeping acquisitions test currently in New Zealand, but proposed law reform will allow the NZCC to con - sider patterns of small acquisitions over a three-year period, which may not individually substantially lessen competition concerns but do so cumulatively. 2.4 Definition of “Control” There is no statutory definition of control. Acquisi - tions of minority interests can be caught by merger control provisions. The test is whether the interest would provide the acquirer with a substantial degree of influence over the target following the transaction. This assessment is contextual, based on a mixture
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