The Commerce Commission has granted clearance for Elgas to acquire 60.25% of the shares in Liquigas Limited from Vector Investment Holdings Limited, as well as the assets of On Gas Limited from Vector Limited.
In reaching its decision, the Commission considered the potential impact of the proposed acquisition on competition in the markets for the distribution, wholesale supply, and retail supply of LPG in New Zealand.
Chair Dr John Small said the Commission was satisfied that the acquisition is unlikely to substantially lessen competition in any New Zealand market.
“Our investigation found that, while Elgas and On Gas are both significant suppliers of LPG, the merged entity is likely to continue to face competitive constraint from other LPG suppliers in the relevant wholesale and retail markets. As a result, we are satisfied that the merged entity is unlikely to be able to significantly increase prices, or reduce quality, in any of those relevant markets.
In relation to the acquisition of Vector’s Liquigas shares, our investigation found that the merged entity is not likely to have the incentive to foreclose rival LPG suppliers from accessing Liquigas’ facilities and distribution services or supply those services on less favourable terms.”
A public version of the written reasons for the decision will be available on the Commission’s in due course.
Background
We will give clearance to a proposed merger if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.
