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Vodafone’s dreams of consolidating the telecoms sector in the land of the long white cloud have hit the buffers after the New Zealand competition regulator blocked its merger with Sky Network Television.
The Commerce Commission ruled that the proposed merger of the two companies would have created a monopoly in pay-TV sports in justifying the decision to block the NZ$2.4bn deal.
The merger would have handed Vodafone a 51 per cent stake in the business and management control as it forged ahead with its push into ‘quad-play’ services where customers buy TV and telephony as part of the same package.
It would have been the latest move by Vodafone to strengthen an operation by diluting its stake after mergers in Australia and the Netherlands and a proposed deal in India with Idea Cellular.
The decision to block the kiwi merger shows that regulatory risk remains high.
Shares in Sky Network Television, which is no longer related to the British company, slumped by almost a fifth. Vodafone said it would consider its options.