Written by Gert de Klerk and Matthew Rosemin
PARIS (Reuters) – France’s two biggest private broadcasters, M6 Group and TF1, have abandoned a merger plan to fend off the rise of US broadcasting platforms, saying antitrust filings made the deal irrelevant.
If the deal had succeeded, it would have changed the French television landscape and redefined the rules of competition related to the advertising market, creating a precedent in Europe and potentially paving the way for similar deals between traditional broadcasters.
“It appears that only structural remedies involving at least a divestment from TF1 TV or M6 TV will be sufficient to approve the proposed merger,” the two companies said in a statement on Friday. Held with the French antitrust authority.
They added that the proposed merger no longer had any strategic justification, although they continued to believe that the merger would make sense in light of “challenges arising from increased competition from international platforms”.
“The deal could have created significant competitive risks, particularly in the television advertising and distribution of television services markets,” the French competition authority said in an online statement.
Benoit Coeur, head of the antitrust watchdog, said the merger, which would have given the combined entity influence over three-quarters of TV advertising in the country, would also give it greater bargaining power with distributors, such as Internet service providers.
“The proposed commitments in particular included the separation of advertising agencies for the TF1 and M6 channels,” Courier said, but added that incentives to compete against each other would have been limited by the major shareholder’s control of TF1. Bouygues (EPA :).
Under the initial merger plan, French conglomerate Bouygues would have ended up taking control of the combined group with a 30% stake while M6’s parent company, Germany’s Bertelsmann media group, would be the second largest shareholder with 16%.
Companies have faced fierce opposition in recent months, including from media group Vivendi (OTC :), owner of France’s largest pay-TV group Canal Plus, and telecoms dissident Iliad founder Xavier Niel.
The controlling shareholders of TF1 and M6 announced their ambitions to merge in May 2021.