Commerce Commission seeks ruling on new merger laws

By SIMON HENDERY

The Commerce Commission has asked the High Court for an urgent ruling on its handling of new merger and acquisition laws.

The declaratory judgment, due next week, could affect several high-profile business deals caught in a bottleneck since the new law took effect.

The country's largest supermarket group, Foodstuffs, took the commission to the High Court in Auckland yesterday to challenge the way it assessed a rival's merger bid, lodged just days before competition laws were tightened.

At a hearing before two judges, Foodstuffs argued that rival Progressive Enterprises' bid for clearance to buy the Woolworths group should be considered under amendments to the Commerce Act that came into force on May 26, a few days after Progressive lodged its application with the commission.

The commission was flooded with applications just before the introduction of the stricter rules, which ban acquisitions that substantially lessen competition in any market.

Before the law change, only acquisitions that resulted in dominance being acquired or strengthened in a market were prohibited.

At the end of the one-day court hearing yesterday, commission lawyer Bill Wilson, QC, asked Justices Hugh Williams and Barry Paterson for an early ruling on the issue, which could have implications for four decisions the commission is due to release within a week.

These include the Progressive application, Caltex's bid for Challenge Petroleum, and Computer Share Registry Services' bid for BT Portfolio Services - all due to be released today - and Lowe Corporation's bid for Colyer Mair, due next week.

Mr Wilson said the commission might seek extensions to delay releasing those decisions while it awaited the court's ruling.

But a spokesman for the commission said it was still scheduled to release the three decisions today.

In court, Justice Williams said he hoped a ruling could be handed down by next Tuesday or Wednesday.

Foodstuffs' challenge to the commission's handling of the Progressive application under the old regime is led by Jim Farmer, QC.

Foodstuffs claims the commission incorrectly interpreted amendments to the Commerce Act and sections of the Interpretation Act when it decided how to process the application.

Progressive, which is named as second defendant in the action and was represented in court yesterday by Lyn Stevens, QC, has joined the commission in arguing that the law was interpreted correctly.

Meanwhile, the commission has for a sixth time delayed its decision on Carter Holt Harvey's application for clearance to acquire the Central North Island Forest Partnership.

The commission was due to release its decision yesterday but said it needed more time to assess recently provided information.

Carter Holt Harvey agreed to the extension and a decision is now due next Friday.

The commission said the delay was not related to the court action by Foodstuffs.