Pioneer DJ parent company Alpha Theta’s proposed acquisition of DJ software Serato has been rejected by the New Zealand Commerce Commission (NZCC).
The merger, first proposed in July last year, was set to see Serato join the Alpha Theta family. Speaking about the acquisition, Dr John Small, chairman of the NZCC, said “that the Commission was not satisfied that the merger would not have the effect of substantially lessening competition.” The NZCC deemed that the merger would give the company significant dominance in both the DJ hardware and DJ software industries.
The statement went on to state: “The evidence gathered by the Commission indicated that Serato and rekordbox compete closely in the DJ software market. While other DJ software providers would remain in the market, we did not consider these rivals, or the possibility of a new DJ software provider entering the market in the near term, would be sufficient to replace the level of competition that would be lost with the merger. We therefore could not exclude a real chance that the merger would result in a substantial lessening of competition for DJ software, resulting in price rises to consumers and/or a lower quality software offering,”
Both companies are expected to appeal. Speaking about the decision, Yoshinori Kataoka, President and CEO of AlphaTheta, said, “We disagree with and are disappointed by the ruling of the New Zealand Commerce Commission against the acquisition. As AlphaTheta and Serato, we believe that the proposed agreement would have accelerated our combined ability to deliver incredible products to DJs and producers around the world by capitalising on our complementary expertise.
“Despite the regulatory findings, our organisations have a long history of working together and we steadfastly believe in the merits and benefits of our ongoing partnership as we seek to harness technology to advance the ways artists create and perform music.”
In May, the UK Government shared the initial findings of its investigation into the ongoing proposed acquisition of Serato by Pioneer DJ’s parent company, AlphaTheta. After “phase one” investigation, the Competitions and Markets Authority (CMA) found that the deal, “if allowed, would create a supplier almost double the size of its nearest rival, consolidating the market and potentially impacting the price, quality, and innovation of DJ software.”
Earlier this year, AlphaTheta Corporation — the parent company of Pioneer DJ and AlphaTheta — announced its new brand for DJ products.