The Commerce Commission approved a plan for Cavalier Wool Holdings to acquire New Zealand Wool Services International's wool scouring business and assets.
The decision affirms the antitrust regulator's draft determinations in March and October where it said the public benefits would outweigh the loss of competition. The number of wool scouring operators in New Zealand has been reducing amid a declining wool clip and increasing exports of greasy wool to China, the Wellington-based regulator said in a statement.
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"As noted in our earlier draft determinations, this acquisition is likely to substantially lessen competition", Commission chair Mark Berry said in the statement. "Cavalier will essentially have a monopoly on the supply of wool scouring services and the supply of wool grease, and will be able to raise its prices when the merger is completed.
"However, our analysis has shown that there are public benefits to New Zealand from this acquisition proceeding. We expect that the rationalisation of the wool scouring industry is likely to lead to lower administration and production costs, the freeing up of industrial sites, and lower ongoing capital expenditure requirements in the future."
