Tourism Holdings’ acquisition of Apollo could go ahead if Australian and NZ competition regulators approve the campervan rental companies' proposal to sell off some of their assets.
Tourism Holdings’ acquisition of Apollo Tourism & Leisure may become a reality instead of wishful thinking for the two campervan rental businesses.
Tourism Holdings revealed today that the companies were prepared to sell off a “significant proportion” of combined assets to meet Australasia merger-clearance expectations.
Tourism Holdings told the New Zealand Stock Exchange (NZX) in an announcement this morning that while it “strongly believed” the proposed merger of Tourism Holdings and Apollo would not substantially lessen competition, it recognised the concerns raised by New Zealand and Australian competition regulators.
The company said it had started discussions with the NZ Commerce Commission (NZCC) and Australian Competition and Consumer Commission (ACCC) around seeking merger clearance – on the basis that the merged entity divests certain assets in each country.
Tourism Holdings said the two companies were willing to sell off about 72% of ATL’s four to six-berth motorhomes in New Zealand and 80% of them in Australia.
Divesting Apollo’s “premium Star RV motorhome brand” as well as a proportion of the forward bookings associated with the fleet sold and any surplus property leases – on an as-needed basis, based on the geographical footprint of a prospective purchaser – was also put forward as part of the suggested deal.
Tourism Holdings also said it was in “exclusive negotiations” with Australian private equity firm Next Capital in the hopes of selling the proposed divestment assets in New Zealand and Australia.
Next Capital has recently entered into an agreement to acquire a controlling interest in budget campervan and adventure group Jucy Rentals.
However, the sale of assets to Jucy Rentals is subject to both the NZCC and ACCC signing off that this is an acceptable divestment.
No definitive agreement has been reached yet, Tourism Holdings said, as discussions with both regulators were ongoing.
In April, the NZ and Australian commissions both raised concerns around the “preliminary competition” over Tourism Holdings' proposed deal; they were worried the merger could push out other suppliers in the motorised RV rental market across Australasia.
The NZCC said in a statement this morning that it was currently consulting on the divestment proposal it had received from Tourism Holdings relating to its application seeking clearance to acquire 100% of the shares in Apollo.
The commission said it was scheduled to make a decision on the application by Aug 2, 2022, but this date could be extended.
