Commission releases revised authorisation, and mergers and acquisitions guidelines

The Commerce Commission has today released revised guidelines that outline its approach to assessing businesses’ authorisation and merger clearance applications. The guidelines were finalised after a public consultation period in March.

“Our Mergers and Acquisitions Guidelines, which outline our approach and process when considering clearances, were last published in 2003. The Authorisation Guidelines, which outline our approach and process when considering authorisations for mergers and agreements, replace the Benefit and Detriment Guidelines published in 1997,” said Commerce Commission Chairman Dr Mark Berry.

“We have revised both to reflect developments in case law, international experience, and the Commission’s plain English standard. The revised merger guidelines also include guidance on our merger process and how we assess failing firm arguments and divestments,” said Dr Berry.

The revised guidelines can be viewed on the Commission’s website at: http://www.comcom.govt.nz/mergers-and-acquisitions-guidelines/ and http://www.comcom.govt.nz/authorisation-guidelines/

Background

The Commerce Commission has an adjudication role in relation to mergers under the Commerce Act.

Clearances

Under the Commerce Act, the Commerce Commission considers applications for the clearance of proposed mergers that might substantially lessen competition in a market, where the applicants wish to obtain protection from legal challenge either from the Commission or from other parties.

Authorisations

Under the Commerce Act, the Commerce Commission is able to authorise proposed mergers that likely substantially lessen competition in a market if it finds that the public benefit of the transaction outweighs any detriment.

The Commission may authorise an agreement that may be in breach of the trade practice provisions of the Commerce Act if it is satisfied that the public benefits of the agreement outweigh the harm arising from the loss of competition.

More information about our role in relation to clearances and authorisations can be found on our website at: http://www.comcom.govt.nz/clearances and http://www.comcom.govt.nz/authorisations