The Commerce Commission has approved the merger of fuel retailers Gull and NPD, creating a nationwide network of around 240 service stations from Invercargill to the far north.
The competition watchdog said today it was satisfied the proposed merger would not substantially reduce competition in New Zealand's fuel market.
Under the deal, both Gull and NPD brands will be retained across their combined network. Gull stations are more common in the North Island, while NPD dominates in the South Island, including throughout Southland.
The merged company will be owned equally by the South Island-based Sheridan family and Australian private equity firm Allegro Funds, which currently owns Gull. The new parent company will be called Astra Energy Group.
NPD chief executive Barry Sheridan will lead the combined business, with Allegro Funds' Fay Bou as chair. The Sheridan family will be the largest single shareholder.
Commerce Commission chair John Small said the regulator conducted a detailed investigation before approving the deal.
"Our investigation included looking at the markets within which NPD and Gull currently operate and assessing whether there would still be adequate competitive alternatives post-merger to constrain the new company's ability to raise prices and reduce the quality of its service," Small said.
"Following this work, we are satisfied that the proposed merger is not likely to substantially lessen competition in any market in New Zealand in which the parties compete, or are likely to compete in future," Small said.
The commission also examined whether the merger could lead to fuel companies working together to exercise collective market power, but concluded it would not change conditions to make such coordination more likely.
Small said the merged entity would continue to face constraints from other major competitors including Z, BP and Mobil.
The companies first announced merger plans in December, promising the deal would help drive down pump prices for motorists.
Sheridan welcomed the approval, saying it would strengthen their ability to keep prices competitive.
"At a time when every cent matters, Gull and NPD joining together will make our ability to support lower fuel prices in NZ even stronger," Sheridan said.
Gull chief executive Dan Gilbert said the merger would bring benefits beyond pricing.
"Beyond pricing, it brings resilience to fuel supply that benefits motorists everywhere," Gilbert said.
"It's going to be exciting to see the 'Gull effect' and 'NPD effect' on fuel competition deliver even more through the combined business, a company with national scale."
The combined company plans to develop a national fleet service for commercial customers alongside retail operations. Gull's Mt Maunganui fuel import terminal and NPD's truck fleet will form part of the new supply network.
The Commerce Commission said its full written decision would be available on its website in coming days.