Commerce Commission green-lights $1.7B merger of Orcon and 2degrees

Commerce Commission green-lights $1.7B merger of Orcon and 2degrees

Concerns about the deal's impact on the MVNO market dismissed by regulator.

Mark Callander (Vocus NZ)

Mark Callander (Vocus NZ)

Credit: Supplied

The Commerce Commission has granted clearance for the proposed $1.7 billion merger of telecommunications companies Vocus Group and 2degrees.

Deputy chair Sue Begg said the commission was satisfied that the merger was unlikely to substantially lessen competition in any New Zealand market. 

“The focus of our enquiries was on wholesale and retail competition in broadband and fixed voice and mobile services," she said. "The evidence before us indicates that the merged entity will continue to face strong competition from existing competitors, including Spark and Vodafone.

“While the transaction will result in the vertical integration of 2degrees’ mobile network with the largest mobile virtual network operator (MVNO), Vocus, we do not consider the transaction will significantly change the incentives of network operators to grant access to MVNOs.”

The impact of the deal on the MVNO market was one area that sparked concern in submissions on the deal.

The proposed transaction involves a newly incorporated Vocus Group company, Voyage Digital, acquiring all of the shares of Orcon Holdings, formerly known as Vocus NZ, and then acquiring all of the shares in Two Degrees Group from its shareholders, Toronto-listed Trilogy International and Tesbrit.

Orcon and 2degrees welcomed today’s clearance as they awaited the final required regulatory approval from the Overseas Investment Office.

“This outcome recognises that the merger will enhance competition and provide benefits to Kiwis and Kiwi businesses. The combined offering of Orcon and 2degrees positions the business as a strong third player in the New Zealand telecommunications industry," said Mark Callander, Orcon Group CEO.

Callander was selected to lead the merged businesses, which will trade under the Orcon brand, last month.

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Tags TelecommunicationsVocus2degreesMVNOsOrcon Group



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