ACCC will not oppose Seven’s Prime merger, but deal is blocked by Prime shareholders
UPDATE 19 December: Prime shareholders have rejected the proposed merger with Seven, with 53.53% voting against the deal. More information will be available on Mumbrella as it comes to hand.
The Australian Competition and Consumer Commission (ACCC) will not oppose the merger between Seven West Media and Prime Media, which is scheduled to go to a vote tomorrow. However, after shareholders Bruce Gordon and Antony Catalano made it clear last week they were planning to block the deal, the regional media business has released a statement to the Australian Stock Exchange (ASX) which says it is ‘unlikely’ the vote will be approved.
The post also announced the retirement of John Hartigan, who will step down from his role of chairman after the vote. A replacement will be announced tomorrow.
Seven championed its future merger with Prime at its 2020 Upfronts event
The ACCC noted in its approval that it was unlikely the vote would go through at tomorrow’s meeting, and said the approval was on the basis that Seven would divest its regional WA radio networks Spirit and RedFM to a third party.
The main focus of the ACCC investigation was in WA, where Prime’s regional TV assets overlap with Prime’s weeknightly TV bulletins. ACCC chair Rod Sims said it was unlikely the same stories would be covered by both media outlets.
“In assessing this proposed deal, we considered the likely impact on competition in providing local news and content to audiences in regional WA,” said Sims.
“We found that Seven West Media’s largely weekly regional newspapers and Prime’s weeknightly TV bulletins generally cover different news stories.
“We also looked at the likely impact on advertisers and news consumers across a number of different media markets, and concluded that the proposed acquisition was unlikely to substantially lessen competition or choice for advertisers and consumers.
“Feedback from advertisers and advertising agencies suggests that Prime’s television and Seven West Media’s newspapers don’t compete closely for advertising revenue, and most advertisers have alternative ways of reaching their target audiences.”
Prime’s broadcast content is already primarily supplied by Seven.
But WIN Corporation boss Gordon and ACM owner Catalano have voiced concerns over the validity and value of the Seven deal, suggesting that outdated media laws are the only reason Seven is the only viable option for a merger currently.
Their concerns, and combined share holding, will block the merger if they vote the way they have suggested they will tomorrow. Prime has said in response that it has ‘enjoyed a long standing relationship with Seven’ and ‘looks forward to working with Seven in the future’.
The Cat must be seething!
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So the Warburton strategic masterplan is off to a flying start with this and another delay in the fire-sale of his magazine arm. Things are NOT looking good over at the Caterpillar franchise
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Seriously…dying assets. Anyone who knows catalano he fights anything. How is ACM performing?
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Surely if Seven’s local newspapers and Prime’s TV bulletins are covering different stories in the same markets, that’s evidence against merging the two. Yes it means that few stories would lose any diversity of reporting, but such diversity is fairly unlikely anyway. The greater loss would be in the diversity of topics being covered.
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