NEW ZEALAND Law and Practice Contributed by: Sarah Keene, Jordan Cox, Antonia Horrocks and Victoria Fowler, Webb Henderson
4.6 Non-Competition Issues The NZCC cannot take non-competition issues into account in a merger clearance review unless they can be categorised as economic efficiencies in relevant markets. However, the NZCC may authorise a merger that is likely to substantially lessen competition where it is satisfied that the transaction would result in such a benefit to the public that it should nevertheless be per - mitted. Public benefits may include broader economic or public interest considerations, such as efficiencies, employment effects or other societal benefits. The Courts in NZME Ltd v Commerce Commission [2018] NZCA 389 examined this point and concluded that non-economic considerations, such as media plural - ity, could be weighed against any economic benefits of the merger. New Zealand also maintains a separate foreign invest - ment screening regime under the OIA, administered by the OIO (see 1.2 Legislation Relating to Particu- lar Sectors ). This regime operates independently from the NZCC merger control framework and focuses on national interest, national security and other public interest considerations relating to investments by overseas persons in sensitive New Zealand assets. These issues are therefore considered separately from competition law analysis. 4.7 Special Consideration for Joint Ventures There are no special criteria for the assessment of mergers that are joint ventures. 5. Decision: Prohibitions and Remedies 5.1 Authorities’ Ability to Prohibit or Interfere With Transactions If parties proceed without clearance and the NZCC considers that the merger is likely to substantially less - en competition, it may commence proceedings in the High Court. The Court may grant interim injunctions preventing completion of the transaction, order dives - titure of assets or shares, impose pecuniary penalties and grant other relief.
5.2 Parties’ Ability to Negotiate Remedies Under the Commerce Act, there is the ability for an applicant to offer a divestment undertaking to reduce the competitive effects of the proposed merger. A divestment undertaking can be made by an applicant at any time in the NZCC’s merger assessment pro - cess. The NZCC can currently only accept undertak - ings to divest assets or shares. They cannot accept behavioural undertakings. Divestment undertakings offered later in the NZCC’s process may result in the NZCC requesting further time for its assessment. When an applicant has offered a divestment under - taking, the NZCC will consider whether the proposed divestment undertaking will remedy the likely substan - tial lessening of competition arising from the proposed merger. The NZCC will assess the potential risks asso - ciated with divestment undertakings on a case-by- case basis measured against the standard criteria of asset, composition and purchaser risks. Since FY 21/22, the NZCC has issued decisions in respect of 52 clearance applications. Of these 52 applications, 35 were granted unconditional clear - ance, and an additional five were granted clearance with a divestment undertaking. There are reforms proposed to the Commerce Act which would give the NZCC the power to accept behavioural undertakings. Check the status of these amendments if using this guide after 1 March 2027. 5.3 Legal Standard When an applicant has offered a divestment under - taking, the NZCC will consider whether the proposed divestment undertaking will remedy the likely substan - tial lessening of competition arising from the proposed merger. The NZCC will assess the potential risks asso - ciated with divestment undertakings on a case-by- case basis measured against the standard criteria of asset, composition and purchaser risks. 5.4 Negotiating Remedies With Authorities The NZCC encourages applicants to offer divestment undertakings at an early stage where they consider that such undertakings may prevent the proposed merger from substantially lessening competition in the relevant market(s).
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