Vocus has received clearance from the Australian Competition and Consumer Commission for its planned takeover of M2 group. However, the New Zealand Commerce Commission has raised certain issues with the deal and is seeking market feedback before taking a decision. The two companies announced in September a merger agreement that would create the fourth-largest telecoms company in Australia by market value and the third biggest in New Zealand. The new company will be worth more than AUD 3 billion and have revenues of around AUD 1.8 billion.
The New Zealand Commerce Commission published a statement of preliminary issues relating to the application from Vocus Communications to acquire M2 Group. The statement of preliminary issues outlines the key competition issues that the Commission considers will be important in deciding whether or not to grant clearance. The Commission invited submissions from parties who consider that they have information relevant to the Commission’s consideration of this matter.
The Australian Competition and Consumer Commission (ACCC) announced that it will not oppose Vocus’s proposed acquisition of M2 Group. According to ACCC, Vocus and M2 have limited overlaps in the supply of retail and wholesale fixed broadband services; the supply of retail and wholesale fixed voice services; the acquisition of transmission services and the supply of data centre services. In markets where Vocus and M2 overlap, they tend to focus on different customer segments, with M2 mainly focused on residential and small business customers and Vocus mainly focused on large enterprise and government customers. Neither Vocus nor M2 are significant suppliers of wholesale transmission services.
Accordingly, the proposed acquisition will not significantly increase vertical integration between wholesale and retail telecommunications services providers. For the ACCC, it is primarily the matter of a merger between two complementary businesses. Significantly, the merged firm will also face significant competition from Optus, Telstra and TPG. This merger consolidates the fourth player in the market.
