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WELLINGTON, May 26 (Reuters) - Fairfax New Zealand and NZME said on Friday that they would appeal the New Zealand competition regulator’s decision to bar their merger.
The companies said in a stock exchange statement that they had filed the case in New Zealand’s High Court because they believed the Commerce Commission was “wrong in fact and wrong in law to decline clearance or authorisation”.
The competition watchdog in early May blocked NZME’s takeover of Fairfax’s New Zealand unit, saying the deal would have led to unprecedented local media influence and built the world’s most concentrated newspaper market outside of China.
Under the proposed deal, NZME, owned by Australian media company APN News & Media, would have paid NZ$55 million ($38.61 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.
Combining the assets would have helped to cut costs by up to NZ$200 million ($138.98 million) over five years, the two companies have said.
If the merger does not go ahead, the local media giants will be forced to find alternative strategies to deal with heavy competitive pressure and the loss of advertising dollars to digital rivals such as Alphabet Inc’s Google and Facebook Inc.
Fairfax NZ’s parent company this month said it would cut 125 Australian journalist jobs, the latest in several rounds of major editorial job cuts over the last decade, fuelling concerns for the future of public interest journalism in Australia.
U.S. buyout firm TPG Capital Management has offered A$2.76 billion to buy Fairfax Australia, while Hellman & Friedman has rival offer worth as much as A$2.87 billion. ($1 = 1.4245 New Zealand dollars) (Reporting by Charlotte Greenfield; Editing by Dan Grebler)