Media merger call delayed until March

‘‘We said at the outset we expected this process to take six months or more.’’ Simon Tong, Fairfax NZ

A final decision on whether to allow New Zealand’s two main newspaper and digital media companies to merge has been delayed until March.

However, the Commerce Commission expects to release a draft decision in November that will provide a clue to its thinking.

The competition watchdog had agreed with NZME and Fairfax NZ to extend the deadline for the two companies’ application to merge, it said in a statement.

‘‘The proposed merger is complex and involves two-sided markets – advertisers on one side and consumers (readers) on the other,’’ it said.

‘‘The commission is continuing to assess the effects of the proposed merger on areas such as the provision of national, regional and local news content and information, including the impact on the quality, accuracy and range of the news media in New Zealand.

‘‘In addition, the commission is assessing whether the proposed merger would enable the parties to increase prices to advertisers and consumers.’’

The commission said it expected to release a draft determination by early November.

In a sign the competition watchdog intends to put the proposed merger through significant scrutiny, it said it was possible a public conference would be held in December. That would provide ‘‘an opportunity for the commission to test the views of NZME and Fairfax and interested parties’’ on the issues raised in the draft, it said.

A final decision would be made ‘‘on or before’’ March 15.

Fairfax NZ managing director Simon Tong said in an email to staff that the delay was ‘‘not a surprise’’ given how long other merger applications had taken.

‘‘We said at the outset we expected this process to take six months or more given the timeframes we have seen for other merger applications to get the green light,’’ Tong said.

NZME chief executive Michael Boggs said the process and extension were consistent with the commission’s ‘‘typical practices’’.

‘‘NZME and Fairfax do not believe anything in the public submissions filed by interested parties undermines the key arguments made in the original application which support a clearance or authorisation being granted in respect of their application,’’ he said in a statement to the NZX.

The commission is also having to consider a merger application from Vodafone New Zealand and Sky Television. Sky and Vodafone would have to renew their engagement vows if they don’t obtain approval by March, under the terms of their June agreement.

Commerce Commission lawyer David Blacktop said in July that the watchdog was taking an average of 66 working days to rule on mergers and acquisitions.