KEY POINTS:
There would still be room for competition in the book retail market if A&R Whitcoulls Group acquired rival Borders New Zealand, according to the Commerce Commission.
In a statement outlining its reasons for granting A&R Whitcoulls clearance to bid for 100 per cent of Borders, the antitrust regulator said A&R Whitcoulls was likely to face continued price competition from rivals such as The Warehouse and non-price competition from the likes of Unity. The book retail chain was likely to face a "degree" of competition from internet retailers too.
Last month, the antitrust regulator announced that A&R Whitcoulls could bid for Borders because it was unlikely to "substantially" reduce competition in the book retail markets or in the book publishing or supply in New Zealand.
A&R Whitcoulls - owned by Australian private equity house Pacific Equity Partners - has 76 stores in New Zealand.
Borders New Zealand is a unit of Michigan-based Borders Group, which is listed on the New York Stock Exchange.
REASONS
Why Commerce Commission gave Whitcoulls the go ahead:
- Whitcoulls will probably face continued price competition from existing book retailers and internet retailers;
- Existing book retailers would be able to expand and exert extra constraint on Whitcoulls by sourcing more books through existing supplier relationships, and securing bigger retail space;
- Constraint on Whitcoulls would probably come from new entry in the form of retailers with bookshop branches;
- The acquisition is unlikely to give Whitcoulls undue market power as a buyer in the publishing market.
