Commerce Commission grants merger approval
The Commerce Commission has given the green light for Evergreen NZ Holdings to acquire 100% of ACM New Zealand.
The acquisition, which involves buying ACM from its parent company ACM Holdings (NZ), was granted clearance following an extensive review of its potential impact on competition within several key markets.
Competition unlikely to be affected
In its assessment, the commission primarily focused on the supply of cash-in-transit services, including both wholesale and retail sectors.
Commerce Commission Chair John Small (pictured above) confirmed that the acquisition is “unlikely to substantially lessen competition in any New Zealand market.”
Small explained that the decision was based on an evaluation of the competitive landscape, comparing the likely scenarios with and without the acquisition.
Declining cash use drives consolidation
Evergreen’s application highlighted significant financial difficulties faced by both Evergreen and ACM, driven by a decline in cash use, a trend accelerated during the COVID-19 pandemic.
“An ongoing decline in the use of cash and reduced demand for cash-in-transit services ... makes it difficult for two national wholesale cash-in-transit providers to be financially viable,” Small said.
Without the acquisition, the commission noted that ACM would likely exit the market, leading to the same outcome of a single provider in New Zealand.
Public benefits anticipated
While not central to the decision, the commission also recognised that the acquisition could offer public benefits, such as maintaining a stable supply of cash-in-transit services and ensuring a smoother transition from two providers to one.
“These outcomes are unlikely to be realized without this acquisition,” Small said.
Background and process
The decision to grant clearance followed a thorough two-step evaluation process.
The commission first assessed whether the acquisition would likely lessen competition.
Having determined that it would not, the second step – considering the public benefit test –was not required.
The commission will release a full public version of its reasons for granting the clearance on its case register in due course.
Both Evergreen, through its subsidiary Armourguard Security, and ACM provide cash-in-transit services across New Zealand, transporting and managing bulk cash and high-value cargo for financial institutions, retailers, and other customers.
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