ComCom seeks submissions on controversial media merger

NZME and Fairfax Media have submitted their merger application to the Commerce Commission.

The Commerce Commission will begin accepting submissions on the controversial proposed merger between NZME and Fairfax Media early next month.

Last month the media companies revealed they were in “exclusive talks” to merge their New Zealand operations. They filed their 120-page application to the Commerce Commission today, which outlines the most likely business structure of NZME acquiring Fairfax and the latter holding a minority stake in the newly merged business as well as cash.

A decision on the merger is due on August 22 but the commission will issue a statement of preliminary issues and call for submissions on the authorisation in a few weeks.

NZME and Fairfax own the majority of media assets in this country, including 17 daily newspapers, five weekly newspapers, 85 community publications, 16 magazines, 10 radio stations and 44 websites.

The application cites several purported justifications for the merger, including that the companies operate in a “crowded market with a large number of other providers of advertising services.”

Fairfax and NZME also believe the quality of news and information content will be improved by the ability of the merged entity to invest in quality editorial content. Despite talk of decreased competition, there is no region in which daily paid newspapers goes head-to-head, they say.

 “There is some overlap in distribution area between the parties’ Sunday papers in the North Island. The Herald on Sunday, however, has its primary circulation volumes in Auckland, while the Sunday Star Times has its primary circulation volumes in the balance of the North and South Islands.”

Facebook's Instant Articles, Apple's Apple News and Google's Accelerated Mobile Pages are all acting as gatekeepers for consumers trying to access news content, they say.

NZME is poised to demerge from its parent company APN News & Media, provided it is approved by shareholders, to list separately on the ASX and NZX in late June.

NZME recently moved into a multi-million dollar office building in Auckland CBD and Fairfax is due to move into Ponsonby's Cider building in August.

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