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A & R Whitcoulls Cleared to Acquire Borders NZ

Reasons for A & R Whitcoulls Cleared to Acquire Borders New Zealand

The Commerce Commission has released its reasons for granting clearance to A & R Whitcoulls (ARW) to acquire 100 % of the shares in Borders New Zealand.
The Commission’s reasons for granting the clearance include:

  • ARW is likely to continue to face price competition from other existing book retailers, such as The Warehouse, Kmart, Paper Plus and Dymocks, and non-price competition from book retailers such as Dymocks and Unity. It is also likely that internet retailers will provide some degree of competition;
  • It is likely that these existing book retailers would be able to expand and exert additional constraint on ARW by sourcing more books through existing supplier relationships, and securing larger retail space;
  • New entry, in the form of retailers which currently have a network of bookshops is likely to act as a constraint on ARW. In addition, once established in a market, new entrants are unlikely to face barriers to expansion; and
  • ARW is a large purchaser of books from publishers, but this acquisition is unlikely to give ARW any undue market power as a buyer in the publishing market.

Background
On 20 November 2007, the Commission granted clearance to ARW to acquire 100 % of the shares in Borders New Zealand as it was satisfied that the proposed acquisition will not have, or would not be likely to have, the effect of substantially lessening competition in the markets for the retail of books in the Auckland CBD, Albany, Wellington CBD, and Riccarton shopping precincts. The
Commission was also satisfied that there would not likely be a substantial lessening of competition in the market for the publishing/supply of books to retailers in New Zealand. The reasons are available on the Commission's website www.comcom.govt.nz under Public Registers - Mergers and Acquisitions. Click on the Decision number in the right hand column.

ENDS

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