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WELLINGTON, May 3 (Reuters) - New Zealand's competition regulator said on Wednesday it had rejected NZME Ltd's (NZM) takeover of Fairfax Media Ltd's
New Zealand unit, saying the proposed merger would not benefit the public and result in lower quality of New Zealand news. "This merger would concentrate media ownership and influence to an unprecedented extent for a well-established modern liberal democracy," Commerce Commission Chairman Mark Berry said in a statement.
Under the proposed deal, NZME, owned by Australian media company APN News & Media Ltd (APN), would have paid NZ$55 million ($38.01 million) for Fairfax's New Zealand operations. It would also have issued new shares to allow Fairfax to hold a 41 percent share in the new listed entity.
The Commerce Commission had said in November it was inclined to oppose the takeover as it would concentrate ownership of 90 percent of the country's print media in one company.
The regulator said on Wednesday its concerns had not changed and that if the two operations were combined each company would lose its largest competitor and prices would rise and quality would fall.
The competition watchdog had twice delayed its final decision as it heard arguments from the two companies as to why the increasing media diversity from the growing number of digital operations meant the deal should be allowed to go ahead.
Media companies globally have watched print subscription and advertising prices plummet as technology companies such as Alphabet Inc's Google
and Apple Inc pick up digital advertising revenue. ($1 = 1.4472 New Zealand dollars)
