Case studies
Competition law and business transactions
Project: X acquires Y
Situation: Part III of the Commerce Act prohibits business acquisitions that have, or are likely to have, the effect of substantially lessening competition in a market. However, where the benefits of an acquisition outweigh the competitive detriments, the Commerce Commission may grant an authorisation to allow the acquisition to proceed.
Parties seeking to acquire a competitor, or in some cases suppliers of inputs or distributors of their products, often must decide if they need clearance or authorisation, or are able to proceed with such an acquisition confident they will not face Commerce Commission action.
Our task: NZIER has worked with many companies and their legal advisors to determine whether an acquisition might substantially lessen competition. We have prepared opinions for company Boards analysing the competitive implications of proposed acquisitions. Where a clearance is desirable, we help with preparation of an application to the Commerce Commission, provide independent expert reports for submission to the Commission and, together with lawyers, liase with the Commission to ensure it has the evidence it needs to grant clearance and that the evidence is being interpreted correctly.
Result: Companies are able to determine their strategy for compliance with the Commerce Act, and promptly obtain any needed approval, on the basis of a complete expert analysis.
Referee comment:
Andrew Peterson, Partner, Minter Ellison Rudd Watts:
'We have worked with NZIER on a number of projects, and have found their advice and assistance extremely valuable. They have the ability not only to understand complex economic issues but are also able to translate their advice into practical business language adding real value to the project. We find them responsive, hard working, and great team members'.
Project: Gas-fired electricity generation
Situation: Our client was granted a resource consent to build a new gas-fired electricity generation plant, which was subsequently appealed to the Environment Court. The appellants proposed that the resource consent should be made conditional on the planting of trees to off set carbon dioxide emissions from the plant.
Our task: Peter Clough of NZIER prepared and presented evidence to the Environment Court on the treatment of carbon dioxide emissions under the Resource Management Act. This showed that minimising the overall cost of emission reduction requires that all emitters face comparable incentives for emission abatement, and that ad hoc measures that are not uniform across all emission sources would increase both costs of new generation and of emission control. Greenhouse gas emissions are more suited to national policy measures, and imposing local level controls through the Resource Management Act would be both counter-productive to the objective of emission reduction in encouraging deferment of new, more energy efficient generation technology, and also inefficient in adding to its costs.
Result: The Environment Court found the appellants’ proposal unreasonable and allowed our client’s resource consent to stand, without any additional conditions for offsetting emissions.
