SYDNEY - [AAP] Fairfax (ASX: FXJ) has failed in its bid to overturn a decision by New Zealand's competition watchdog blocking a merger between its local assets and rival NZME (ASX: NZM).

New Zealand's High Court on Tuesday dismissed the media firms' appeal, backing the NZ Commerce Commission's assessment of the likely impact on online national news and Sunday newspapers, plus reader and advertising markets for some community papers.

The court said the commission was also entitled to have looked beyond economic and financial impacts, and to have considered the importance of a diverse media and the possibility of lower standards post-merger.

"We cannot be certain that a material loss of plurality will occur," the court said in its ruling.

"However, the risk is clearly a meaningful one and, if it occurred, it would have major ramifications for the quality of New Zealand democracy."

Fairfax Media chief executive Greg Hywood said the ASX-listed company will review the judgement in detail when it becomes available.

"The merger brought synergies that would have sustained journalism at scale in New Zealand for many years," Mr Hywood said.

The proposed merger between New Zealand's two dominant media players would have combined NZME's flagship New Zealand Herald newspaper and nzherald.co.nz website, a portfolio of radio stations, including Newstalk ZB, and the GrabOne deals site with Fairfax's titles including the Dominion Post, Sunday Star-Times, The Press, the stuff.co.nz website and magazines.

The court did not agree with the Commerce Commission that the proposed merger would have resulted in the likelihood of substantially lessened competition for advertising in Sunday newspapers.

 

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