Green light for Tourism Holdings and Apollo tie-up

Tourism Holdings and Apollo Tourism & Leisure have finally been given the go-ahead by the New Zealand Commerce Commission on their proposed merger.

The regulator said in a statement it granted clearance for Tourism Holdings (THL) to acquire 100% of the shares in Apollo in its proposed acquisition.

However, the competition watchdog said the clearance was subject to an undertaking from THL and Apollo to sell some of Apollo’s assets to budget campervan company Jucy Rentals for $45 million.

THL had told the NZX earlier on Friday that it reached an agreement with Apollo to sell $45m of its assets including 110 four- to six-berth motorhomes from Apollo's rental fleet in NZ and 200 four- to six-berth motorhomes in Australia.

Alongside the more than 300 motorhomes, Apollo’s Star RV motorhome brand and the property leases for surplus depots in Auckland, Perth, Alice Springs, Darwin and Hobart were included in the deal.

Concerns

Commission deputy chair Sue Begg said the regulator raised concerns about the proposed acquisition in its previous statement of unresolved issues around the lessening competition in the supply of motorhome rental services.

“The proposed acquisition would have resulted in THL increasing its already significant position in motorhome rentals, particularly in the four to six-berth motorhome segment of the national market for RV rentals,” she said.

“We were concerned that other competitors or potential entrants would not provide enough competition to prevent THL from raising prices or decreasing quality.”

But Begg said the $45m deal with Jucy “satisfied” the regulator that the deal was unlikely to substantially lessen competition. 

'Important step'

THL’s chief executive, Grant Webster, said the decision was an “important step” towards the successful completion of the merger. 

“We are focused on satisfying the remaining conditions to the merger in a timely manner with the intent to complete the transaction before the end of 2022,” he told the NZX.

The merger of the trans-Tasman operators may have been greenlit in NZ but still has a way to go in Australia, where it still needs clearance from the Australian Competition and Consumer Commission (ACCC), approval from the Australian Foreign Investment Review Board, and approval from Apollo shareholders and the supreme court of Queensland. 

The ACCC is expected to announce a decision on Sept 29 next week.

Tourism Holdings’ shares were placed in a trading halt ahead of the decision, and climbed 2.6% to $2.72 since they resumed trading.