New Zealand’s Overseas Investment Office gave the green light to a proposed NZD1.3 billion ($936 million) merger of Sky Network Television and Vodafone New Zealand, after the Commerce Commission rejected it.
According to ZDNet, the companies can now push ahead with the merger.
Vodafone and Sky argued the merger required Overseas Investment Act approval because more than 25 per cent of both companies is owned by overseas interests, and the purchase price and asset value are each more than $100 million, the office explained in a statement.
The Commerce Commission blocked the merger in February due to concerns it would “substantially lessen competition”, based on an assessment of the country’s broadband and mobile markets.
However, this was “not relevant” to the Overseas Investment Office’s assessment, the statement said, because the commission “relates to competition in a market which is different to the criteria that the Overseas Investment Office is required to consider for an application involving significant business assets.”
Last month, in a statement issued on the New Zealand stock exchange, the companies said they had filed appeals within the statutory time period “in order to preserve their rights”, while they waited for details of the competition regulator’s full reasons for rejecting the deal.
The proposed merger was first announced in June 2016, as the companies looked to create a leading integrated telecommunications and media group in New Zealand. The merged entity would also have a monopoly in premium sports content in the country.
However, the proposal was met by stiff opposition from rivals, including Spark, 2 Degrees and Internet NZ, which sucessfully filed applications to New Zealand’s High Court seeking a stay on the merger in the event the Commerce Commission cleared the deal.