9 Mar 2018

Commerce Commission shoots down another merger deal

1:51 pm on 9 March 2018

The Commerce Commission has refused another company takeover deal, this time with TradeMe.

Trade Me screen shot

Photo: RNZ

The monopoly watchdog has knocked back online advertiser and auction company TradeMe's application to take over Motorcentral, a company which produces software used by independent second hand car dealers. TradeMe has a similar sort of business.

The Commission said it declined the takeover because it might have substantially lessened competition in the supply of management systems and online classified advertising to motor vehicle dealers.

"Based on the evidence received, we could not exclude the real chance that this could result in a substantial lessening of competition in these markets, including deterring new entry," Commission Chairman Mark Berry said.

He said the deal could have reduced the ability of car dealers to list on rival advertising websites, and also strengthened TradeMe's already powerful position.

Motor vehicle advertising is one of the strongest growing and most profitable parts of TradeMe.

The company said it was disappointed by the refusal and would wait to see the full decision before deciding its next step.

"We'll consider all our options, including appealing the decision. We'll also explore how we can work with Motorcentral to deliver some of the benefits we planned to our mutual customers," Alan Clark, Head of Trade Me Motors said.

The Commission's decision is the latest knock back of a sizeable corporate deal. In the past year it's declined a merger between Sky TV and Vodafone, media companies NZME and Stuff, and insurance companies Suncorp and Tower.