Mercury cleared to acquire Trustpower's retail business

Mercury NZ said it will buy Trustpower's retail business for $441 million. Photo / File

The Commerce Commission has granted clearance for Mercury NZ to acquire Trustpower's retail business.

Power generator and retailer Mercury NZ earlier this year said it would buy Trustpower's retail business for $441 million once it met several conditions, including Commerce Commission approval.

The agreement was also conditional on the restructure of Tauranga Energy Consumer Trust (TECT) and Trustpower shareholder approval.

Commerce Commission deputy chairwoman Sue Begg said it was satisfied the acquisition was unlikely to substantially lessen competition in any New Zealand market.

"Our investigation indicated that there are no regions in New Zealand where Mercury and Trustpower are each other's closest competitors.

"Further, the merged entity would face competition from other electricity and gas retailers, including both large gentailers and smaller retailers," Begg said.

"Our investigation therefore found that the proposed acquisition would not have a significant detrimental effect on competition when compared with what would likely happen if the merger did not proceed."

Begg said their investigation did reveal differences in the level of competitive intensity, and in prices being offered, in different regions.

"Several parties also raised concerns about retail competition in electricity in Tauranga, and in particular about the effect of the Tauranga Energy Consumer Trust (TECT) rebate.

"We encourage consumers – in Tauranga and elsewhere – to shop around to make sure they are getting the best deal, taking into account any applicable rebates and other terms."

A public version of the written reasons for the decision will be available on the Commission's case register in the near future.

Trustpower's retail business sells electricity, gas, fixed and wireless broadband and mobile phone services to about 231,000 customers nationwide.

Combined, the businesses would have about 780,000 connections across both energy and telco services.