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NZ regulator rejects Euronet's Ezi-Pay buy-out bid

First time a merger application has been rejected since 2008.

Paul McBeth
Sat, 16 Jun 2012

BUSINESSDESK: The Commerce Commission has turned down an application by US payment processor Euronet Worldwide to buy New Zealand's Ezi-Pay, the first time the regulator has rejected a merger application since 2008.

In a split decision, the commission said it was concerned about the merger's potential impact on prepaid mobile phone top-ups, it said.

That is the first time the regulator has declined clearance for a merger since it vetoed Tegel Foods proposal to buy rival chicken company Brinks Group in October 2008, according to the regulator’s register of clearances.

"In terms of the market for the distribution and in-store payment processing of pre-paid mobile phone top-ups, the commission's decision was not unanimous," it said.

"Two of the three division members were not satisfied that the proposed acquisition will not have, or would not be likely to have, the effect of substantially lessening competition in that market."

Epay was seeking to buy Ezi-Pay and assets from related companies Compass Communications and Eftdata for an undisclosed sum. The New Zealand unit made a profit of $2.5 million on revenue of $16.5 million in 2009, according to its latest filing to the Companies Office.

Two reasons behind the merger were deleted from the public notice, though epay indicated it would "give rise to some scale efficiencies".

Auckland-based Ezi-Pay was founded in 2003 by chief executive Dave Spicer, Karim Hussona and Paul Carter.

The regulator said it will release its written reasons for the decision within two weeks.

Paul McBeth
Sat, 16 Jun 2012
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NZ regulator rejects Euronet's Ezi-Pay buy-out bid