The Commerce Commission (the Commission) has been receiving comments on the new draft Mergers and Acquisitions Guidelines and Authorisation Guidelines. These guidelines set out how the Commission will assess mergers and acquisitions, clearance applications and authorisation applications.
The Commerce Act 1986 prohibits mergers that are likely to substantially lessen competition in a market. Merging firms may, however, apply to the Commission for clearance or authorisation of a proposed merger. The draft Mergers and Acquisitions Guidelines essentially set out how the Commission will assess whether a merger is likely to substantially lessen competition and the process to be followed for clearance applications. The current guidelines were published in 2003 and the latest draft includes updates to reflect recent decisions by the New Zealand Courts and the Commission, international best practice based on merger guidelines in specified jurisdictions and the Commission's plain English standard. They will ultimately also include the Commission's Failing Firms and Divestment Remedies Guidelines – the intention being to provide a "one stop shop" setting out how the Commission assesses clearance applications.
The draft Authorisation Guidelines explain the Commission's process when determining authorisation applications. Anti-competitive transactions (such as mergers or arrangements that are likely to substantially lessen competition) may be authorised if the public benefits arising from the transaction outweigh the competitive detriment. The draft Authorisation Guidelines incorporate an updated version of the Benefits and Detriments Guidelines, first published in 1997.
Final sets of both guidelines are expected to be published by mid-2013. Until that time, the 2003 Mergers and Acquisitions Guidelines and 1997 Benefits and Detriments Guidelines will remain relevant.
The Commission is receiving comments on the draft guidelines and is holding a series of briefings for legal advisers and economic agencies, which Buddle Findlay is participating in.