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This article has been written by Varun Vishnuvardhasa, pursuing the Diploma Programme in M&A, Institutional Finance, and Investment Laws (PE and VC transactions) from LawSikho.


Merger control regime is basically which allows to review the proposed transactions and make necessary orders for more competition New Zealand merger regime is basically contained under commerce act 1986. This is regulated by the commerce commission. The New Zealand Commerce Commission regulates the merger, acquisition of assets transfers, etc of companies. It is the same as that of NCLT in India. They can also take enforcement actions in the courts. Third parties can enforce this directly. This new merger control regime basically prohibits anybody corporates which would affect the competition in the market. The commission cannot give or grant permission/ clearance retrospectively. The commission also has the power to restrict joint venture agreements as well. The commission can also control the transactions of the acquirer if it involves any substantial influence over the activity of others. But the term “control” has not been defined under the act.

The New Zealand commerce commission work’s on the following criteria:

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  • Shareholding less than 15 percent does not give rise to the necessary degree of influence;
  • Shareholding between 15 to 20 percent is unlikely to give influence, except in certain special circumstances;
  • Shareholding between 20 to 50  percent is likely to give rise to substantial influence on management policy.

Speaking of the jurisdictional thresholds there are no such restrictions, but all mergers are subject to the act. All the mergers should comply with the commission’s mergers and acquisition guidelines 2004 otherwise they will be considered void. The parties can also approach the commission for granting of clearance but however subject to the guidelines mentioned in the act otherwise it shall be considered as unconditional. Merger filings are compulsory before approaching the commission this applies to both domestic mergers as well as foreign to foreign mergers. The commission also has the power to try offshore’s mergers but limit it to the extraterritorial provisions. Recently New Zealand and Australia have mutually signed an agreement that removes the power of commissions to impose penalties on Australian directors and vice versa. 

In Australia, it is governed by “Australian competition and consumer commission”(ACCC). The regulatory enforcement of this agreement between New Zealand and Australia was governed under the Trans Tasman Proceedings Act, 2010, however, the act is not currently in force, and in order to control the mergers of other countries the commerce( cartels and other matters) amendment bill is yet to pass in the parliament of New Zealand. This bill gives power to the commission to seek remedies from businesses of other countries; it also provides a 12 months period to apply for a merger before the high court. The foreign investors are governed under the Overseas Investment Act, 2005, and Takeover Act,1993. Parties who commit any offense under the act are entitled to pay the fine which may extend up to NZ$300,000(three hundred thousand). As stated earlier it is mandatory for the parties to file for the merger, the commission shall look into the matter and they can also impose a temporary injunction if in case the merger is unconditional and subject to investigation, post-merger proceedings are sparse. There are fees for merger filings etc mentioned in the act :

  • NZ$2300 for issuance of notice of clearance;
  • NZ23,000 for seeking authorization ( the commission has the discretion to refund NZ$20,000 to the applicant if the authorization is granted)

Merger policy

The main concept of merger policy is to ensure that the mergers do not jeopardize conditions for competition Mergers consolidate the ownership and control of business assets, including physical assets Most mergers raise no serious prospect of an increase in market power but however the parties shall comply with the new rules regarding merger policies the merger policy basically focuses on 2 goals;

  1. Economic goals;
  2. Public interest goals.

In terms of economic goals, it focuses on the ownership and control of business it can enhance the performance by improving the business efficiency in terms of profits and share values. Public interest goal in the case as there are more competitors participation in the market the merger policy regulates the competitor’s ex-ante( it restrains/ stops mergers which are likely to affect the competition in the market) and also terminates various anti-competitive agreements and abuse of market power But without a proper merger policy, it would create disorganization in merger control this policy also helps in controlling the unwanted infringements which would harm the competition in the market. To keep it short this merger policy aims to curb out the structural changes which would damage the incentives of the market 

Waiting period

The act clearly specifies the waiting period for granting of the approval, it states that the commission shall have 10 working days to decide on the clearance notice to the parties and 60 working days to decide on the authorization of the merger. If the commission does not respond within the given time, the application is said to have been rejected. But according to the Merger and Acquisition  Process Guidelines, the maximum period given for clearance or approval shall not exceed more than 40 working days however some of the mergers approval has taken a longer period

  • Seagate’s application of acquisition of Samsung assets for hard drive business took 116 days;
  • Pact ltd application for acquisition of viscount plastics took 132 days;

The fastest approval was 15 days. According to the statistics of 2017-2018 the Commission has received an average of over 12% more applications as compared to that of 2016.

Investigations by the Commission

The Commission has authority provided under the act to investigate the matters relating to mergers and acquisitions of the parties. Once the application is made by the parties to the Commission within 5 working days the Commission shall conduct a detailed examination of the merger and if it finds any faults or on its own motion thinks to conduct investigation then it shall give notice to the parties. The Commission then shall within 15 working days publish a “statement of preliminary issues” on the website. The Commission shall also provide time for the parties to furnish evidence or other documents for investigation. After all the research and survey on the 40th day, the Commission shall grant clearance to the merger if no flaws are found. 

Case laws

Here are some of the recent landmark case laws relating to the merger regime; 

  1. NZME Limited and ors vs Commerce Commission [2018]

This is a case wherein the NZME ltd merger was ceased by the commission under section 67 of the commerce act for violating the norms( illegal competition). This led to the decrease of various other media firms, news newspapers to decline the supply and its demand. This decision of the commission was challenged by NZME in the higher court ( court of appeal) however the court of appeal upheld the decision of the commission and a fine was imposed on NZME ltd.

2. Commerce Commission vs First gas Ltd

First gas limited was penalized to pay around 3.4billion dollars for entering into anti-competitive acquisition which was breach under Section 47 read with Section 27 of the act which talks about the trade restraint clause. The penalty imposed by the commission was more than the acquisition merger of Gas Net Pvt ltd.


The party shall have to go through the website. The commission shall notify all the rules and laws on the website from time to time. Parties shall be granted clearance for merger and acquisition if it does not violate any guidelines mentioned by the commission. It is also mandatory for the parties to adhere to the rules and laws made by the commission. sometimes the approval of the commission may lead to decrease competition in the market but the merger may benefit the public as a whole, in such situations the commission shall bring up the “total net welfare” test this basically revises  the transaction as a whole and checks upon the benefit  to the public 

Clearance process

  1. Parties shall make an application to the commission either by post or through the mail by paying a fee of NZ$3,680;
  2. Within 30 days from the date of application, the commission shall review and send an acknowledgment to the parties [ if the parties have violated any guidelines the commission shall impose a fine ofNZ$100,000(individual) and NZ$300,000(body corporate) mentioned under section 103(2) and (4) o the act.];
  3. For fast approval the parties shall brief about the needful of the acquisition in their application like the rationale of the merger, various ancillary agreements associated with the merger, etc;
  4. The application shall be backed up by corroborating evidence, documents, and required information;
  5. In terms of confidentiality, the parties may make a separate application to the commission with reference to the Official Secrets Act, 1982.


Unlike India, governed by the Competition Commission of India(CCI) in case of mergers, etc,  New Zealand is controlled by the commerce commission.  The laws or the regulatory framework of New Zealand are exhaustive in nature compared to that of India. 

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