ComCom green-lights Verifone's cancelled acquisition of NZX-listed Smartpay
- 12 June, 2020 07:12
Anna Rawlings (Commerce Commission)
The Commerce Commission has belatedly granted clearance to Verifone NZ to buy the assets and business of point of sale payments company Smartpay in New Zealand.
As the parties both supplied payment terminals to retailers for in-store electronic payments, the Commission investigated whether the proposed acquisition would have any impacts on competition, especially for small and medium sized retailers.
However, in the interim, the original deal was terminated by Verifone due to regulatory clearance not being provided by a 30 April contract deadline.
"Notwithstanding the termination of the original deal, Smartpay views the clearance as a positive outcome as it clears the way should any subsequent deal with Verifone be agreed," Smartpay told investors today.
Commission chair Anna Rawlings said this morning the Commission was satisfied that the proposed acquisition was unlikely to substantially lessen competition in any New Zealand market.
“Although we consider that the merging parties are competitors, the presence of competing suppliers, with the ability to expand, is likely to constrain Verifone in its ability to raise prices or reduce service quality,” said Rawlings.
“Post-acquisition, Verifone would continue to face competition from terminal resellers and Windcave, while Ingenico also imposes a competitive threat.”
The Commission also considered whether the proposed acquisition might give Verifone the ability and incentive to foreclose rival terminal suppliers by refusing to supply terminals or payment processing services.
Rawlings said that the Commission was satisfied there were sufficient alternatives for terminal suppliers and so Verifone would be unlikely to engage in such conduct.