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Court action against proposed cinema merger

Commission starts court action against proposed Hoyts/ Village Force merger

Media Release 1999/95

The Commerce Commission has started court action to stop the proposed merger of the Hoyts and Village Force cinema chains.

Commission Acting Chairman Mark Berry said that the Commission has investigated the proposal and is concerned about its impact on competition in New Zealand markets for film distribution and screening.

The Commission sought interim injunctions to prevent the merger until the courts could make a final decision. In the Auckland High Court on Friday the companies gave a Deed of Undertakings to the Court.

Under the Deed the companies must:
· continue to own, manage and operate their film booking and buying businesses separately and without change;
· preserve those assets relevant to their film distribution and exhibition businesses; and
· provide the Court and the Commission with lists of those assets by August 27.

The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any markets. Courts can impose penalties of up to $5 million against a company and can order divestiture of assets and shares.

A trial date has not yet been set and is likely to be at least several months away.

Until the Court makes its decision, information about the case is sub judice and the Commission will make no further comment.


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