The Commerce Commission has given the go-ahead for the Vocus and M2 merger.

Both Vocus and M2 are Australia based providers of telecommunications services with extensive operations in New Zealand.

The Commerce Commission says it is satisfied that the acquisition will not have, or would not be likely to have, the effect of substantially lessening competition in the affected markets and as such has allowed Vocus to acquire up to 100% of the shares and/or assets in M2.

Dr Mark Berry, Commission chairman, says, “While both Vocus and M2 provide calling, broadband and data services to residential and commercial customers, they are not close competitors for any of the services that they provide.

“We also consider that strong competition will continue to be provided by Vodafone, Spark and Chorus."

The Commission also considered whether merging Vocus's national fibre optic backhaul network with M2's retail calling and broadband services would give it the ability to foreclose downstream competitors.

“Given the presence of Spark, Vodafone and Chorus, which all have large backhaul networks, we did not consider that foreclosure would be likely,” Berry says.

A public version of the written reasons for the decision will be available shortly on the Clearances Register, according to the Commission.

In September of this year, Vocus and M2 announced the plans to merge and create a $3 billion full-service vertically integrated telco.

According to the pair, the merged company will be New Zealand's third largest integrated telco and the fourth largest in Australia.

The merger will combine telecommunications infrastructure and corporate customer base from Vocus with M2's expertise in the consumer and SME segments.