NZ competition watchdog set to block NZME’s Fairfax takeover
WELLINGTON, Nov 8 (Reuters) – New Zealand’s competition regulator on Tuesday said it was inclined to oppose APN News & Media’s takeover of Fairfax New Zealand, saying it would concentrate 90 percent of the country’s print media in one company.
The companies say they cannot separately compete with international tech giants and social media, but the Commerce Commission said the deal would make the sector more concentrated than in any country except China.
That would be an "unacceptable concentration of editorial power," the regulator said in its draft decision, adding that it would make a final decision on the issue in March.
Shares in APN’s New Zealand subsidiary NZME fell 20 percent, the lowest level since listing in June. APN News & Media, which is 14.99 percent owned by News Corp, rose 1.1 percent, while Fairfax Media Ltd was up 0.62 percent.
Under the proposed deal, NZME would pay NZ$55 million ($40.32 million) for Fairfax’s New Zealand operations and issue new shares to allow Fairfax to hold a 41 percent share in the new listed entity.
NZME and Fairfax said they planned to make further submissions.
Media companies globally have watched print subscription and advertising prices plummet as technology companies such as Alphabet Inc’s Google and Apple Inc pick up digital advertising revenue.