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The Commerce Commission has given the green light for the proposed merger of low-cost, Kiwi-owned fuel providers NPD and Gull.
Announced in December, NPD and Gull have sought clearance from the commission to combine their businesses into one, creating the country’s “largest independent, majority Kiwi-owned” fuel provider.
A formal applicationwas lodged with the commission in January, with the merger going ahead pending an investigation and regulatory approval.
The commission granted clearance for the merger today, allowing Astra Energy Group to acquire all shares in GNZ Holdco (parent company of Gull) and NPD Group Investments (parent company of NPD).
The commission considered the merger’s possible adverse effects but found it would likely have a negligible effect on competition in the fuel industry.
“Our investigation included looking at the markets within which NPD and Gull currently operate and assessing whether there would still be adequate competitive alternatives post-merger to constrain the new company’s ability to raise prices and reduce the quality of its service,” commission chairman Dr John Small said.
The Commerce Commission has granted clearance for the proposed merger of New Zealand-owned fuel providers Gull and NPD. Composite image / Bevan Conley, Sylvie Whinray
“Following this work, we are satisfied that the proposed merger is not likely to substantially lessen competition in any market in New Zealand in which the parties compete, or are likely to compete in future.”
After reviewing potential impacts on the relevant markets, the commission concluded it was unlikely the new entity, if approved, would co-ordinate with other competitors to exercise their collective market power, influence prices and restrict output.
The merged entity would operate about 240 sites from Invercargill to Kaitāia, linking Gull’s strong North Island presence with NPD’s South Island footprint.
Together, the companies supply about one billion litres of fuel annually, a scale they said will increase their buying power and efficiencies to deliver lower prices at pump stations.
NPD owner and chief executive Barry Sheridan will become the group chief executive of the new company, with ownership split evenly between the South Island-based Sheridan family and Allegro Funds, an Australasian private equity firm that owns Gull.
“Both companies are focused on making it easy for customers to pay less for fuel,” Sheridan said in December.
