The Overseas Investment Office has announced that consent has been granted to the merger of SKY Network Television and Vodafone New Zealand, more than two months after the Commerce Commission declined to grant clearance.
The merger of these two companies required Overseas Investment Act approval because Vodafone and SKY are more than 25% owned by overseas interests and the purchase price and asset value are each more than $100 million.
The merger of the two companies met the criteria required by the Overseas Investment Act 2005.
The application involved significant business assets and so to gain consent the applicants needed to demonstrate:
- Their business experience and acumen
- Their financial commitment, and
- That those controlling the companies are of good character and meet certain criteria under the Immigration Act 2009.
The OIO found the parties satisfied those criteria.
It says the fact that Vodafone and SKY were recently unsuccessful in their application to the Commerce Commission for clearance to this merger was not relevant to the OIO’s assessment. The Commerce Commission test 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.
In February, the Commerce Commission, turned down the merger bid, saying the merger would have created a strong vertically integrated pay-TV and full service telecommunications provider in New Zealand owning all premium sports content.