Caltex gets the nod, mostly

By Phil Boeyen, ShareChat Business News Editor

Thursday 28th June 2001

Oil company Caltex has been given the go ahead to fill up on most - but not all - of Rubicon's (NZSE: RBC) Challenge petrol business.

The Commerce Commission says Caltex New Zealand can acquire up to 100%of the shares in Challenge Petroleum, subject to divesting some petrol stations.

The petrol stations to be divested are those in areas where only Caltex and Challenge operate retail sites, and where the nearest competitor is at least 10km away.

Commission chairman, John Belgrave, says that after the proposed acquisition Caltex will still be the smallest of the four major oil companies in New Zealand and will not be dominant in any market.

"The Commission is satisfied that constraint from the other oil companies would prevent a combined Caltex/Challenge from acquiring or strengthening dominance in any market," says Mr Belgrave said.

The Commission notes that in the past two years Gull Petroleum has entered the retail market and established a network of 20 sites in the North Island, and has told the Commission that it intends to expand its operations.

"All industry participants spoken to by the Commission stated that there is an intense level of competition, and they do not anticipate the proposed merger to have a significant impact on competition."

Comments from our readers

No comments yet