THL Cleared To Acquire Apollo Subject To Divestment

The Commerce Commission has granted clearance for THL Group (Australia) Pty Limited (THL), a subsidiary of Tourism Holdings Limited, to acquire 100% of the shares in Apollo Tourism & Leisure Limited (Apollo) (Proposed Acquisition).

The clearance is subject to an undertaking from THL and Apollo entities to divest 110 of Apollo’s existing four to six-berth motorhome rental fleet in New Zealand, Apollo’s Star RV brand, forward motorhome rental bookings (relating to the fleet being divested), the lease to an existing Apollo depot and other assets to a subsidiary of Jucy Group (2020) Limited (Jucy) (Divestment Undertaking). Jucy is a large campervan rental company in New Zealand.

The parties have also entered into related arrangements where an Apollo entity will provide certain services to Jucy on a transitional basis, and the merged entity (THL/Apollo) will supply 40 motorhomes in calendar year 2023 with an option for an additional supply or procurement of a further 40 motorhomes in calendar year 2024. These arrangements do not form part of the Divestment Undertaking, but the Commission took them into account in its assessment.

“In our Statement of Unresolved Issues we raised concerns that the Proposed Acquisition, absent the Divestment Undertaking, would be likely to substantially lessen competition in the supply of motorhome rental services,” said Deputy Chair Sue Begg.

“The Proposed Acquisition would have resulted in THL increasing its already significant position in motorhome rentals, particularly in the four to six-berth motorhome segment of the national market for RV rentals. We were concerned that other competitors or potential entrants would not provide enough competition to prevent THL from raising prices or decreasing quality.”

Ms Begg said that the sale of motorhomes, the Star RV brand and other assets to Jucy, combined with the related arrangements, satisfied the Commission that the Proposed Acquisition is unlikely to substantially lessen competition.

“The Commission is satisfied that the divestment of these assets to Jucy, taking into account the related arrangements, will mean that there will not be a substantial reduction in the level of competition.”

A public version of the written reasons for the decision, including the Divestment Undertaking, will be available on the Commission’s case register in due course.

Background
We will give clearance to a proposed merger if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market. In giving clearance, the Commission may accept a written undertaking to dispose of assets or shares.

Further information explaining how the Commission assesses a merger application is available on our website.

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