Commerce Commission assesses Spark’s Teamtalk offer

Spark’s $22.7m takeover offer for TeamTalk may be dead in the water following Vodafone’s offer of $10m for 70 percent of TeamTalk subsidiary BayCity Communications, but nonetheless the Commerce Commission is putting the offer under the microscope after Spark wrote to it seeking clearance for the deal.

The Commission has released an issues paper inviting submissions from interested parties by 14 May and has set a provisional date for a decision of 22 May, but says this is likely to missed.

The Commission will give clearance to the deal only if it is satisfied that it will not “have, or would not be likely to have, the effect of substantially lessening competition in a market in New Zealand.”

Spark claims the TeamTalk business is highly complementary to its own and that there is competitive overlap between the their businesses in only broadband, mobile, managed data services, and data centre services and that this competitive overlap is minimal.

The commission will examine if the merger would reduce competition through eliminating the constraint that the two entities presently impose upon one another, and whether the merged entity would be able to engage in behaviour that would foreclose rivals and render them less able to compete.

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