Ports Sector: Lyttelton-Otago Merger Talks Grind Slowly
August 11th, 2010
There’s been an independent consultant’s report compiled on the proposed operational merger between the Port of Otago and Lyttelton Port Company, and the latter’s major shareholder, Christchurch City Holdings, has provided support in principle to the combined functions of the two competitors. But there’s no word out of either party. Negotiations continue between the two ports, and have continued to do so since a stock market announcement at the end of April, but there’s only speculation to go on in the meantime as the rivals try to figure out how a marriage could work.
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The Commerce Commission, which would have to approve any merger, hasn’t received any application, which would be expected to be heard under its authorisation process. The Commission uses this course of action when a proposed merger or acquisition may result in a substantial lessening of competition in a market “if it finds the public benefit directly attributable to the transaction outweighs any detriment.” As well as ComCom approval, shareholders in both ports would have to support the move. The proposed merger would see the operations combined, but assets would remain with the respective organisations.
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