New Zealand regulator raises competition concerns around Sky-Vodafone proposed deal
Reuters
Published Oct 30, 2016 23:26
Updated Oct 30, 2016 23:40
New Zealand regulator raises competition concerns around Sky-Vodafone proposed deal
WELLINGTON (Reuters) - New Zealand's competition regulator on Monday asked for more detail on Sky Network Television's (NZ:SKT) plan to buy Vodafone PLC (L:VOD) for NZ$1.3 billion (763.46 million pounds), citing concern it would dampen competition from rival broadband and mobile providers.
The Commerce Commission said it was deferring its decision, which had been due in November, to an unspecified date.
Sky's shares dropped 4.6 percent after the announcement, heading for their largest daily loss since May.
The Commerce Commission said it was worried rivals would not be able to achieve scale in competition with the company created by the combined Pay TV provider and New Zealand's No. 1 mobile phone provider. The new company will be one of New Zealand's biggest listed firms with annual revenue of about NZ$2.9 billion, the companies have said.
"Over time this could reduce competition in these markets and potentially enable the merged entity to raise prices," the regulator said in a statement.
Telecommunications company Spark New Zealand (NZ:SPK) has opposed the deal, arguing that Sky's monopoly on premium sports content rights is a key concern.
Sky Network and Vodafone in June announced Sky Network planned to buy Vodafone, funding the deal via new debt and new Sky shares. Vodafone will own 51 percent of the combined entity if the deal goes through.
Sky TV said in a statement that it would work quickly to provide additional information to the Commerce Commission. The companies have until Nov. 11 to respond to the regulator.
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Written By: Reuters
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