A man loads boxes onto an Armourguard truck. Photo: Armourguard / supplied
The Commerce Commission has allowed a merger of two firms in the cash handling and transport sector, even though it will create a monopoly for the enlarged company.
It has cleared Evergreen - which runs Armourguard Security - to take over rival ACM, a part of the Linfox Armaguard Group.
Both firms transport cash and other precious goods (mainly for banks) restock automated teller machines and store bulk cash.
Commission chairperson John Small said it had decided competition would not be substantially lessened, given the financial position of the businesses.
"It is very likely that either Evergreen or ACM would cease to operate in the near future, resulting in a single national provider of wholesale cash-in-transit services regardless of whether the proposed acquisition proceeds."
Small said both businesses had been losing money as the pandemic further reduced demand for cash, banks rationalised branch networks and inflation raised costs.
He said there was also public benefit in ensuring cash transport and other services were maintained.
"These include the ongoing stable supply of cash-in-transit services to the market and the orderly transition from two cash-in-transit providers to one, outcomes unlikely to be realised without this acquisition."
The Reserve Bank had backed the merger as a way to ensure orderly change in the industry.
The merger approval contrasted with the commission's recent rejection of two high profile mergers involving DJ equipment and software firms and the North and South Island arms of supermarket operator Foodstuffs.