NZME pulls plug on Stuff merger
By Rebecca Howard
Oct. 24 (BusinessDesk) - A proposed merger between NZME and Stuff is over with the dominant New Zealand newspaper publishers deciding against taking their case to the Supreme Court.
"NZME will not appeal the Court of Appeal’s adverse decision in relation to the proposed merger of NZME and Fairfax Media's New Zealand subsidiary Stuff. This brings the merger process to a conclusion," the company said in a brief statement. The publisher of the New Zealand Herald newspaper has previously indicated a willingness to take the case to the Supreme Court.
Fairfax Media was not immediately available for comment.
The two companies applied to amalgamate in 2016, arguing the merged entity would be more able to survive the global competition for local advertising dollars from online search and social media giants such as Google and Facebook.
The Commerce Commission declined to clear the merger, arguing it would concentrate too much media influence in one entity. A subsequent appeal by NZME and Stuff, heard in the High Court in October 2017, was unsuccessful.
In a second appeal Stuff and NZME claimed the Commerce Commission went beyond its mandate by ignoring economic gains from the tie-up for fear of diluting diversity of voices in the media landscape. That appeal was dismissed by the Court of Appeal.
Both NZME and Stuff have pursued alternative strategies in the absence of a merger. NZME has rolled out new units aimed at capturing digital advertising and is in the process of developing paid-for premium content.
Meanwhile, Stuff has closed or sold a third of its mastheads, largely regional giveaway newspapers and agricultural publications. It is also building a suite of utility products such as retail broadband service Stuff Fibre. Australian parent Fairfax is in the middle of its own A$2.2 billion merger with Nine Entertainment Co. The New Zealand arm isn't seen as a core business if the Australian merger goes ahead.
NZME said it will continue to focus on growing audience and engagement and achieving advertising revenue growth. NZME shares were unchanged at 63 cents.