Armourguard, the dominant supplier of cash-in-transit services in New Zealand, is on the cusp of establishing its own monopoly.
On Wednesday, Australia-based Linfox Armaguard announced it entered into a contract to sell its NZ CIT subsidiary ACM to its rival.
The acquisition by Armourguard of ACM is subject to a review by the Commerce Commission, and is likely to prove uncontroversial.
As in Australia, the economics and sustainability of cash distribution is proving challenging, as digital payments take off and New Zealand transitions to a ‘less cash’ world.
Still, one of the drivers of the sale of ACM must be the need by Armaguard to release capital to plough into its struggling core business in Australia.
Evergreen NZ Holdings, the owner of Armourguard, will buy ACM and then amalgamate the two businesses into a new enterprise, Evergreen (Armourguard Logistics).
Shane O’Halloran, the veteran CEO of Armourguard Security, will lead the merged business.
O’Halloran said the proposed merger “represents a positive development in the management of cash logistics and wholesale cash distribution in New Zealand, and seeks to provide the stability, resiliency and future of the cash economy in New Zealand.
“Cash usage in New Zealand has been in steady decline over the past two decades which accelerated due to the impacts of the COVID-19 pandemic.
“This decline in cash usage has led to significant excess capacity within the New Zealand cash logistics services infrastructure. Armourguard Security and ACM have each struggled to support the rising costs of servicing the New Zealand cash economy.
“The requirements of the New Zealand cash logistics market are simply not enough to sustain both major players.
“However, cash remains a critical component of New Zealand society and its market economy.”