PUBLIC VERSION Commerce Act 1986: Business Acquisition Section 66: Notice Seeking Clearance Date: 15 July 2013 Proposed Acquisition of Terralink International Limited by PropertyIQ NZ Limited 2710498_1 CONTENTS Part 1: Overview .......................................................................................................................................... 4 Part 2: Transaction Details ........................................................................................................................... 5 2. The acquirer: ........................................................................................................................................ 5 3. The seller: ............................................................................................................................................. 6 4. Structure of the parties ........................................................................................................................ 6 5. Details on what is to be acquired ......................................................................................................... 6 6. Explanation of commercial rationale for the proposed merger. ......................................................... 7 7. Copies of most recent versions of documents bringing about the proposed merger. ........................ 7 8. Competition agencies in other jurisdictions. ....................................................................................... 7 Part 3: The Industry ..................................................................................................................................... 8 9. Description of relevant goods or services supplied by the merger parties. ........................................ 8 10. Description of industry ....................................................................................................................... 18 11. How sales are made ........................................................................................................................... 20 12. PropertyIQ’s Costs.............................................................................................................................. 22 13. PropertyIQ’s Pricing ........................................................................................................................... 22 14. Development of Property Databases ................................................................................................. 22 15. Current industry trends and developments ....................................................................................... 23 16. Recent mergers in the industry .......................................................................................................... 24 Part 4: Market Definition ........................................................................................................................... 25 HORIZONTAL AGGREGATION .................................................................................................................... 25 17. Market definition ............................................................................................................................... 25 VERTICAL INTEGRATION ............................................................................................................................ 27 18. Details of any creation or strengthening of vertical integration that would result from the proposed merger. ............................................................................................................................................... 27 Part 5: Counterfactual ................................................................................................................................ 28 19. Description of what is likely to happen to the business operations of the merger parties and the market/industry in the event that the proposed merger does not take place. ................................. 28 Part 6: Competition Analysis ..................................................................................................................... 29 CONSUMER PROPERTY REPORTS .............................................................................................................. 29 20. Identities of relevant competitors in the market and how they all compete in the market. ............ 29 21. Outline of the estimated market shares in terms of sales, and, where relevant, volume and productive capacity, of the merger parties and competitors identified above. ................................ 32 22. The extent to which the merger entity would be constrained in its actions by the conduct of existing competitors in the markets affected ................................................................................................. 35 PROPERTY PROFESSIONALS INFORMATION SERVICES ............................................................................. 36 23. Identities of relevant competitors in the market and how they all compete in the market. ............ 36 24. Outline of the estimated market shares in terms of sales, and, where relevant, volume and productive capacity, of the merger parties and competitors identified above. ................................ 38 25. The extent to which the merger entity would be constrained in its actions by the conduct of existing competitors in the markets affected ................................................................................................. 39 CORPORATE PROPERTY INFORMATION SERVICES .................................................................................... 39 26. Identities of relevant competitors in the market and how they all compete in the market. ............ 39 27. Outline of the estimated market shares in terms of sales, and, where relevant, volume and productive capacity, of the merger parties and competitors identified above. ................................ 42 28. The extent to which the merger entity would be constrained in its actions by the conduct of existing competitors in the markets affected ................................................................................................. 43 GEOSPATIAL DATA SERVICES ..................................................................................................................... 43 29. Identities of relevant competitors in the market and how they all compete in the market. ............ 43 30. Outline of the estimated market shares in terms of sales, and, where relevant, volume and productive capacity, of the merger parties and competitors identified above. ................................ 45 31. The extent to which the merger entity would be constrained in its actions by the conduct of existing competitors in the markets affected ................................................................................................. 46 WHOLESALE PROPERTY INFORMATION SERVICES .................................................................................... 46 32. Identities of relevant competitors in the market and how they all compete in the market. ............ 47 33. Outline of the estimated market shares in terms of sales, and, where relevant, volume and productive capacity, of the merger parties and competitors identified above. ................................ 49 34. The extent to which the merger entity would be constrained in its actions by the conduct of existing competitors in the markets affected ................................................................................................. 49 2710498_1 2 POTENTIAL COMPETITION: CONDITIONS OF ENTRY ................................................................................. 50 35. The requirements for new entry and/or importers in the relevant market(s). ................................. 50 36. Factors that could impede entry; and what might prompt new entry post-merger. ........................ 51 37. Likely businesses that do not currently supply the market but which the Applicant considers could supply each of the relevant markets. ................................................................................................. 52 38. Extent to which the Applicant considers that potential entry would be sufficient to constrain the merged entity in the markets affected. ............................................................................................. 54 39. How long the Applicant expects it to take for entry to occur, and for market supply to increase, in respect of each of the potential entrants. ......................................................................................... 54 COUNTERVAILING POWER OF BUYERS ..................................................................................................... 54 40. The extent to which the Applicant considers that the merged entity would be constrained in its actions by the conduct of buyers in the markets affected. ............................................................... 54 41. Identities of the top five buyers by sales and/or volume (including overseas companies/importers) in the relevant market(s). .................................................................................................................. 55 COORDINATED MARKET POWER ............................................................................................................... 55 42. The various characteristics of the market that, post-merger, the Applicant considers would either facilitate or impede coordination.