An Australasian bus and coach business is seeking clearance to buy NZ Bus and its subsidiaries.

Competition watchdog the Commerce Commission has received a clearance application from Kinetic NZ Holdings to buy NZB Holdco, trading as NZ Bus.

If the buyout goes ahead, the merged entity would be the largest player in the New Zealand bus market, a clearance application says.

NZ Bus is currently majority owned by Australian private equity firm Next Capital which has more than $600 million of funds under management.

It operates 27 government-backed contracts with a fleet of more than 800 buses, with about 1300 drivers and 14 depots located across Auckland, Wellington and Tauranga.

Kinetic operates bus and coach services in New Zealand and Australia, including Go Bus urban and school bus services across New Zealand and SkyBus airport transfer services at Auckland Airport.

NZ Bus has three customers: Auckland Transport, Wellington City Council and Tauranga City Council.

Kinetic's top five customers are the Ministry of Education, Auckland Transport, Environment Canterbury, Ministry of Business, Innovation and Employment and Waikato Regional Council.

Kinetic says that it and NZ Bus currently overlap only in the supply of urban bus services, with the only geographic overlap being in Auckland.

The Commerce Commission gives clearance to a proposed merger if it is satisfied that the merger is unlikely to substantially lessen competition.

Kinetic's clearance application says the acquisition of NZ Bus would be highly complementary to its existing operations in New Zealand, principally through its existing Go Bus business.

Kinetic wants to grow its presence in Auckland, where NZ Bus has a strong presence, but Kinetic does not, and to expand into new regions where Kinetic does not operate, for example Wellington and Tauranga.

The application says the merged entity would remain subject to competitive constraint in tenders from a range of strong competitors.

-Stuff/John Anthony.