The New Zealand Commerce Commission has granted clearance for infrastructure investment company Infratil Limited to acquire up to 50% of the shares in Vodafone New Zealand Limited.
If the acquisition that was announced in May goes through as planned, NZ-based Infratil would walk away with half of the telco, while Canada-headquartered Brookfield Asset Management would own the other 50%.
The deal is worth a total NZ$3.4 billion.
In granting approval to Infratil, the commission focused on the company's other assets, which includes a 51% share of Trustpower Limited -- an electricity generation and electricity retailing company.
The Commission said Infratil submitted that Vodafone and Trustpower would continue to operate as independent companies and while the Commission accepted the claim, it said analysis of the proposed acquisition was based on the conservative assumption that the businesses of Trustpower and Vodafone could be combined.
In reaching its decision, the Commission said it focused on the possible impact of the proposed acquisition in the national markets for the retail supply of broadband and mobile services and decided it was satisfied Infratil's proposed shareholding in both Vodafone and Trustpower would not substantially lessen competition in any of the markets it assessed.
"While Trustpower has in the past been an aggressive competitor in residential broadband, with a particular focus on energy and broadband bundles, several other multi-utility providers have similarly emerged including Vocus, Nova Energy and Contact Energy. 2Degrees and Stuff are also competing effectively in the residential broadband market alongside Spark and MyRepublic," Commission Chair Anna Rawlings said.
"As it stands, Vodafone and Trustpower are not each other's closest competitors and even in regions where they would hold high market shares, such as Bay of Plenty and Wellington, they will continue to face effective competition from several other national operators.
"Consistent with the mobile market study preliminary findings, we consider competition in mobile markets is generally driven by the three network operators and is therefore unlikely to be affected by Infratil's acquisition."
For these reasons, Rawlings said the Commission was satisfied that the proposed transaction should be granted clearance.
Vodafone NZ's newly minted CEO Jason Paris, who joined in November from fellow NZ telco Spark, said the acquisition was a great outcome for consumers and businesses, marking a "new era" for the company.
"It's the absolute best of both worlds for customers. We've got the backing of two new world class and long-term investors plus we can continue to tap into Vodafone's global expertise, including all the services our customers value such as global roaming, global procurement, and the world's largest internet of things platform," Paris said while announcing the sale.
The CEO said "key things" currently present at the telco would remain following the acquisition, including Vodafone NZ's strategy, people, management team, and brand. The key change that would take place, he said, is the changing of the ownership guard.
The deal follows Vodafone NZ in 2016 nearly merging with Sky Network Television under an agreement to form an integrated telco and media group. The proposed deal would have seen Sky acquire all of Vodafone NZ's shares for a total purchase price of NZ$3.44 billion.
Prior to Paris joining the telco, Vodafone NZ had been gearing up to go public.
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