Will NZ's Commerce Commission block the NZME/Fairfax merger?

The New Zealand Commerce Commission has released a draft determination on the proposed merger between NZME and Fairfax indicating it would not allow the two companies to merge. The draft determination said:

The Commerce Commission’s preliminary view is that, on the basis of the information provided to date, it is not satisfied that the merger will not have, or would not be likely to have, the effect of substantially lessening competition in a market. The Commission is also not satisfied that the merger will result, or will be likely to result in such a benefit to the public that it should be permitted. Therefore, the Commerce Commission’s preliminary view is that it would be likely to decline to grant authorisation for the merger pursuant to section 67(3)(c) of the Commerce Act 1986.

The New Zealand Herald reported after the release:

Commission chairman Mark Berry said in a statement that a merger would put New Zealand behind only China when it came to a concentration of ownership in print media.

Fairfax said the two companies would take time to review the decision and provide more information to the commission. A final decision is expected by March.

E tū, the union representing journalists, said it welcomed the preliminary decision.