Commerce Commission out to reverse setback

By DANIEL RIORDAN

The Commerce Commission is seeking to overturn a High Court ruling that the watchdog erred in blocking Southern Cross Healthcare's takeover of Aetna Health.

The commission wants leave to take its case to the Court of Appeal.

The commission said this month that a full takeover would give Southern Cross too dominant a position in the health insurance market.

But the High Court said the overwhelming market share Southern Cross would gain would be offset by low barriers to market entry, and that the commission had defined the market too narrowly.

The setback was the commission's first in its key domain of business acquisitions in almost a decade.

Competition law experts said the cracks revealed in the commission's work were likely to encourage other companies to pursue takeovers they might otherwise have let go.

Companies would more readily appeal against commission decisions that initially went against them, they said.

Commission chairman John Belgrave had no comment to make yesterday, saying the matter was before the courts.