Bauer Media given all clear to acquire Seven West Media’s Pacific Magazines

Two of Australia’s largest magazine publishers will come together, with the competition watchdog today giving the green light to Bauer Media’s bid to purchase Seven West Media’s Pacific Magazines.

The Australian Competition and Consumer Commission (ACCC) had initially expressed concerns about the $40m acquisition, flagging that the publishers have titles which are in direct competition with each other. By coming together, the watchdog said quality and the number of available titles could suffer.

Despite the crossover in content, Bauer and Pacific’s magazines will sit under the same roof now

Now, however, the watchdog has given it the green light, and Seven West Media anticipates the sale will be completed as soon as 9 April.

The watchdog noted the crossover between titles such as Bauer’s Woman’s Day and Take 5, and Pacific’s New Idea and That’s Life, but ultimately determined the transaction was not likely to substantially lessen competition.

ACCC chair Rod Sims said magazine titles were likely to close regardless of this deal.

“The significant declines in the circulation and revenue experienced by many magazines are sustained, substantial and likely to continue, resulting in less investment in content and fewer retail promotions,” he said.

“We note that some magazine titles have already closed, and others are likely to follow, regardless of this deal.”

The ACCC also decided that the content produced by both Bauer and Pacific Magazines was also available from other sources, so it was not vital that the competitive tension between the two was sustained.

“Ultimately, we determined that although there us a notable level of competition between the particular print titles, the transaction was not likely to substantially lessen competition because publishers in other media, particularly online publishers, will increasingly compete with Bauer.”

Consumers’ tendency to consume content online would also curtail Bauer’s ability to raise prices or reduce investment in content, the ACC said.

The ACCC noted that while consumers claim to value the tactile nature of print magazines, they actually aren’t often frequent purchasers of the titles.

The deal’s approval is a win for Seven West Media’s managing director and CEO James Warburton, who has faced numerous hurdles including this transaction’s delay and the postponement of the 2020 Tokyo Olympics.

He said today’s deal offered value to both parties.

“We welcome today’s regulatory approval of the sale of Pacific Magazines to Bauer Media. This transaction provides $40m in cash consideration (pre-adjustments and leave provisions). Additionally, the $6.6 million of advertising we are receiving from Bauer over three years further enhances the value of the sale, allowing the titles to continue to reach the valuable audiences SWM commands,” he said.

“Pacific Magazines has always been an important part of Seven West Media and will leave a lasting legacy, and I want to personally thank the hard working and dedicated team who have worked tirelessly to transform the business in response to changing market conditions. These efforts mean that Pacific’s assets will have a bright future as part of a larger group with Bauer, and SWM will maintain a relationship through the successful television show Better Homes and Gardens.”

Mumbrella had an interview scheduled with Bauer CEO Brendon Hill today in which questions about company structure, redundancies and titles merging would have been asked. The interview, however, was cancelled this morning.

Mumbrella is attempting to get answers on these issues.

Timeline of the Bauer Media and Pacific Magazines deal

7 October, 2019: Seven West Media in talks to sell Pacific Magazines to Bauer Media

21 October, 2019: Seven West Media agrees to sell Pacific to Bauer Media for $40m

19 December, 2019: ACCC voices concerns over Bauer’s $40m Pacific Magazines buyout


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