Vodafone New Zealand and Sky Network Television have decided to pull the pin on the proposed multibillion-dollar merger of the two entities.
In a statement released to the Australian Securities Exchange (ASX) on Monday, the parties announced the decision to terminate the sale and purchase agreement that was first penned in June 2016, when Vodafone Group and Sky reached an agreement to form an integrated telco and media group via Sky acquiring all Vodafone NZ shares for a total purchase price of NZ$3.44 billion.
The merger hit a roadblock in February, with the New Zealand Commerce Commission declining clearance due to concerns of the combined entity potentially lessening competition in the mobile telecommunications and broadband markets.
Charging ahead with its merger plans in April, Sky and Vodafone were able to gain approval from the Overseas Investment Office instead of the commission as both companies are more than 25 percent owned by overseas entities, and because their asset value and purchase price are both worth more than $100 million.
At the time, the Overseas Investment Office called the Commerce Commission's decision on the matter "not relevant" to its own assessment, because they are subject to different tests.
Vodafone NZ had previously warned that it would review the commission's rejection and "consider all courses of action" and submitted an appeal to the Commerce Commission.
Sky and Vodafone noted on Monday they had decided to withdraw the appeal of the Commerce Commission decision, but were tight-lipped on why the merger has been binned.
"Sky and Vodafone NZ will continue to work together to strengthen our commercial relationship for the benefit of the customers and the shareholders of our respective organisations," the companies wrote.