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ComCom rejects insurer Aon's bid to buy fire sprinkler and alarm business

Friday 3rd March 2017

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The Commerce Commission has rejected an application by insurer Aon New Zealand to buy the fire sprinkler and alarm inspection business of Fire Protection Inspection Services, saying it would have given the merged entity a dominant grip on the country's sprinkler inspectors. 

The regulator wasn't satisfied Aon's acquisition wouldn't substantially reduce competition, as it involved New Zealand's two biggest sprinkler firms and would see most of nation's sprinkler inspectors being employed by one company. The commission said it wasn't satisfied smaller regional players would have been able to act as a constraint on the dominant player or that new inspectors could enter the market in a timely manner. 

"There are currently a limited number of competitors that provide sprinkler inspection services in many areas in New Zealand," commission chair Mark Berry said in a statement. "We were concerned that this proposed merger would have therefore eroded choice, which could have led to higher prices or lower quality services." 

The competition regulator last week turned down a bid by pay-TV operator Sky Network Television to merge with telecommunications firm Vodafone New Zealand last week. Of the 19 clearance decisions made since the start of 2015, the regulator has turned down three and put conditions on two other approvals.  

Aon made the application to buy the businesses in November, which it said would give the insurer access to Fire Protection Inspection Services' staff and create more opportunities to sell complementary services.

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