ACCC chair Rod Sims calls for more advertiser feedback as Ooh Media APN Outdoor merger placed in doubt

ACCC chairman Rod Sims has called on more advertisers using out-of-home to give their views on the proposed merger of Ooh Media and APN Outdoor with the commission signaling it is likely to block the $1.6b merger based on current evidence.

ACCC chair Rod Sims says approval unlikely on current evidence.

In a move that is understood to have surprised executives at APN and Ooh Media, the ACCC issued an update saying the majority of submissions on the merger were against it.

Sims told Mumbrella around 30 to 40 submissions on the merger had been received.

“Our view is that the out-of-home market, and I guess the advertising market more generally, will be more competitive with having these two players remaining separate,” Sims said.

“That is our current view. We will see what happens, but that is our current view.”

He said concerns were broad-based.

“Clearly the majority were expressing concerns. Certainly the majority had concerns and some of them had significant concerns.”

Site owners and competitors also voiced concerns, but Sims said it was the customers of outdoor he was most wanting to hear from before the ACCC handed down what would be an “irrevocable decision”.

“We have had (submissions from) all the categories that you would expect. I suppose any more concerns or any more issues or any more comments one way of the other from those who want their products advertised would be helpful, ” he said.

He also noted the views of competitors.

“We don’t quite treat (competitors) in the same way, because sometimes when competitors complain that is a good thing.

“But here they were making comments that when offering a portfolio of out-of-home outlets to the advertising agencies they felt that they might face difficulty because they’d be competing against bundled offers which could be targeting and excluding them from the market.”

Sims said the ACCC current view had broad backing in the submissions.

“Obviously we have done our own analysis but I think it’s fair to say the three headings of concern there have been well backed by commentary we have had from the market. Now we are out to get views from the people and obviously the merger parties  will give us a lot of views and this is why we go through the statement of issues.”

He said that the ACCC remained open-minded about the merger, but wanted to make it clear to the market where its thinking was heading.

Sims also said that while it was far from the most complex merger that the ACCC had dealt with, it posed some important questions.

“It’s a merger that raises more issues than most and we have done a lot of analysis and a lot of consultation.”

He said that the out-of-home industry’s small slice of the overall advertising market was not necessarily a reason for the merger to be given the go ahead.

“There has been a lot of speculation running up to this statement of issues that of course they are only five-and-a-half per cent of the market, why would you care? This is a very common issue … we deal with these sorts of issues all the time.

“The key issue is what is the market? And its a bit like groceries, saying is there a market for groceries or is there a separate market for biscuits. If the price of biscuits go up, well I’ll go and buy an apple. This is all about how substitutable is the product one from the other.”

Sims said there were people who had told the ACCC out of home was an important part of the way they advertise.

“They certainly see it as its own market,” he said.

“The assessment task here is what is the market? Is it all advertising? Out-of-home media has been growing faster than other categories of media, it is one that has special characteristics. As I drive to Sydney airport, as I do a fair bit, you are obviously captive given the parking lot that is the way of getting into Sydney airport. It’s a popular form of advertising, it capture people who are on the move, it captures a particular demographic, but this judgement about what’s the market is at the heart of merger analysis.”

Shares in Ooh Media were down 4.12% at lunchtime while shares in APN Outdoor were down 4.6%.

The ACCC will hand down its final determination on July 6.



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