Commerce Commission approves Tourism Holdings merger with Apollo

Tourism Holdings and Apollo Tourism & Leisure want to merge to create a stronger campervan company after they suffered during the pandemic.

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Tourism Holdings and Apollo Tourism & Leisure want to merge to create a stronger campervan company after they suffered during the pandemic.

The Commerce Commission has approved a merger between campervan company Tourism Holdings and its Australian counterpart Apollo Tourism & Leisure after they agreed to sell some assets.

Tourism Holdings and Apollo announced plans to merge in December last year, to create a larger global campervan company that could better cope with disruptions from the Covid-19 pandemic.

The pandemic has been tough on campervan rental companies who rely on international tourists for most of their business, with Tourism Holdings previously describing it as the biggest single challenge in its history. Combining the two businesses would enable them to reduce their fleets, pay down debt and operate more efficiently together.

The commission cleared the merger on Friday after Tourism Holdings and Apollo agreed to sell some assets to rival Jucy Group for $45 million, allaying the regulator’s competition concerns.

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Commission deputy chairperson Sue Begg said the regulator had been concerned that the deal would have resulted in Tourism Holdings increasing its already significant position in motorhome rentals, particularly in the four to six-berth motorhome segment of the national market for campervan rentals, and that other competitors or potential entrants would not provide enough competition to prevent the company from raising prices or decreasing quality.

However the sale of motorhomes, the Star RV brand and other assets to Jucy, combined with related arrangements, satisfied the commission that the deal was unlikely to substantially lessen competition, she said.

JOHN BISSET/STUFF

The Waitaki lakes area was busy with campers rushing to set up their caravans at their favourite camping sites at the weekend.

The clearance is subject to Tourism Holdings and Apollo divesting 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 Jucy.

Tourism Holdings chief executive Grant Webster said the decision was an important step towards the successful completion of the merger with Apollo.

“We are focused on satisfying the remaining conditions to the merger in a timely manner with the intent to complete the transaction before the end of 2022,” he said.

The merger remains subject to refinancing, clearance from the Australian Competition and Consumer Commission, and approvals from the Australian Foreign Investment Review Board, Apollo shareholders and the Supreme Court of Queensland.

Australia’s competition regulator is expected to release its decision next Thursday.

Shares in Tourism Holdings closed up 3.8% to $2.75, their highest level in more than three months.

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