Pay-television broadcaster Sky New Zealand and telecommunications company Vodafone New Zealand have scrapped plans to merge.
The two parties made the announcement in a statement that also confirmed that they would be dropping an appeal lodged against the Commerce Commission’s decision to block the merger.
“Sky and Vodafone New Zealand will continue to work together to strengthen our commercial relationship for the benefit of the customers and the shareholders of our respective organisations,” the two businesses said.
Commission chair Mark Berry outlined the regulator’s concerns about the impact of the proposed merger on competition in the sports-media, broadband and broadcast markets in a letter in October. The commission said in February that subsequent submissions had not resolved the concerns and the two businesses announced an intention to appeal to the High Court in March.
According to the New Zealand Herald newspaper, Sky NZ chief executive John Fellet said that the decision to scrap the appeal and merger was mutual.
“The more we started looking at this, the more it looked like we could acquire the synergies without having to go through the merger,” Fellet said. “My attorneys were telling me the merger could take a year, we could probably bank on it being at least NZ$1m (€650,000/$729,000) and then it would still be a coin flip on whether you win or lose.”
He added: “At the end of the day I'd rather use that million dollars for additional content for my customers.”
Vodafone would have become a 51-per-cent majority shareholder in Sky NZ – which has rights to various sports properties, including the NRL Australian rugby league competition – through the deal.