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Fonterra believes New Zealand Dairies (in receivership) will struggle to find a new owner quickly if Fonterra's bid for the company is denied.
The commerce commission today released an issues paper, outlining the key aspects it will take into consideration when considering whether to approve Fonterra's proposed merger.
Fonterra, the world's largest dairy exporter, applied last week for commission approval to buy the assets of Waimate-based New Zealand Dairies.
NZD has been collecting raw milk from farmers in South Canterbury and North Otago since 2007.
Its parent company was recently declared bankrupt in Russia and placed into receivership here in May.
The commission says it will consider the existing competition, potential competition and the situation if this sale is not approved.
Fonterra considers there is only a "small probability that an alternative purchaser to Fonterra would be found, particularly one who would be able to complete a timely purchase".
The exporter also believes most suppliers in the South Island will still have a choice of processor, should the merger be accepted.
The public have until July 20 to have their say.