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High Court rejects Fairfax/NZME appeal

Wednesday, 20 December 2017
By Print21

NZME headquarters in Auckland.

The NZ High Court has upheld a decision by the Commerce Commission to block a proposed merger of the country’s two leading newspaper publishers, NZME and Fairfax New Zealand.

In May, the corporate regulator ruled against the merger saying it would “concentrate media ownership and influence to an unprecedented extent for a well-established modern liberal democracy.”

In its decision today, the High Court said: “We agree with the Commission that a substantial loss of media plurality would be virtually irreplaceable.”  The court also dismissed criticisms by Fairfax NZ and NZME about the process adopted by the Commission, and ruled that the Commission was entitled to costs.

The two companies are now considering whether to appeal the ruling.

Fairfax CEO Greg Hywood said: “The High Court’s decision is disappointing. We will review the court’s full judgment in detail when it is available.

“While the merger brought synergies that would have sustained journalism at scale in New Zealand for many years, our New Zealand business has continued to implement its own strategy and shape a separate future. I would like to thank all our people for working so rigorously and effectively through a lengthy period of uncertainty.”

NZME chief executive Michael Boggs said the company was reviewing the judgment, including the option to appeal.

Boggs said he was disappointed with the decision because NZME believed the merger was in the best interests of both shareholders and the industry as a whole. “It would have improved the efficiency of news and entertainment content generation and distribution to New Zealand audiences.”

NZME’s assets include the flagship New Zealand Herald, six regional daily papers, the NZME radio network and e-commerce sites GrabOne, HeraldHomes and driven.co.nz. Fairfax NZ’s assets include stuff.co.nz, more than 60 metro, Sunday, regional and community newspapers, and a share of neighbourly.co.nz.

Under the proposed merger, NZME would have paid $NZ55 million ($A38m) for Fairfax’s New Zealand operations and issued new shares to allow Fairfax to hold a 41% stake in NZME.

 

 

 

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