The Court of Appeal has knocked back the proposed media merger between NZME and Stuff.
The two companies were challenging a judge's refusal to give the merger the green light after the Commerce Commission first rejected the deal.
In May last year, the commission declined to authorise the tie-up, arguing it would concentrate too much media influence in one business.
The subsequent High Court appeal by New Zealand Herald owner NZME and Stuff was unsuccessful when Justice Robert Dobson found that the regulator was entitled to place significant weight on the perceived loss of media plurality in the deal.
The companies then took the challenge to the Court of Appeal, focusing on the regulator rejecting the merger "against a backdrop of very large quantified net benefits", which the High Court found to be between $133 million and $209m.
The Court of Appeal, however, was not swayed and dismissed the challenge today.
NZX-listed NZME and Stuff, the New Zealand arm of ASX-listed Fairfax Media, applied to amalgamate in 2015, arguing the merged business would be more able to survive the global competition for local advertising dollars from online search and social media giants such as Google and Facebook.
Since the merger was first suggested, the goalposts have moved significantly.
NZME, which also owns The Northern Advocate, Rotorua Daily Post, Bay of Plenty Times, Hawkes Bay Today, The Whanganui Chronicle and commercial radio titan NewstalkZB, is marching on with plans to charge Kiwis for online news.
In July, Australia's Nine revealed plans to merge with Fairfax across the Ditch.
The new Aussie media giant would be called Nine, with the 177-year-old Fairfax brand set to disappear from the Australian news landscape
The details of the deal made no secret of which party was the bigger brother in the $A4 billion ($NZ4.35b) agreement. Nine will come away with a 51.1 per cent share to Fairfax's 48.9 per cent, and the chief executive and chairman will both come from the entertainment company.
The deal in Australia, however, is far from done and there's still a chance - if small - that the Australian regulator might step in to block the mega-merger.
Speaking to the Herald after the Nine merger was announced, First NZ Capital head of institutional research Arie Dekker said if the NZME appeal was unsuccessful , Fairfax could look to merge Stuff with another local player.
"For example, a merger of the Fairfax NZ business with MediaWorks would add diversity, with Fairfax combining its print assets with the radio and television assets of MediaWorks."
