Issues A to E: Mergers
14. New Zealand has a voluntary pre-merger notification system. The parties to a merger must make their own assessment of whether a proposal might substantially lessen competition. This assessment is informed by the Commission's Mergers and Acquisitions Guidelines, including the safe harbours, and the Commission's written reasons for merger decisions. This means that the parties to the great bulk of mergers which have no adverse impact on competition have no need to notify the Commission.
15. The merger provisions are also designed to encourage the parties to seek a clearance or authorisation if the merger raises significant competition issues. The incentive effect arises because the Commission can challenge a proposed or partly or fully consummated merger in the High Court where a clearance or authorisation has not been sought or granted.12 If the matter goes to court then the process will be adversarial, is likely to cost more and take longer to conclude. Therefore, it is generally in the interests of the parties to use the clearance or authorisation process where significant competition issues are likely to arise.
16. This system works largely as it should do. The Commission receives very few applications in relation to proposals that do not have some noticeable impact on the process of competition. And it is rare for parties to attempt to consummate a merger that raises serious competition issues outside of the clearance and authorisation processes. Although the merger clearance system is fundamentally sound the rest of this section considers possible improvements.
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