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
Some of Pacific’s best, most loyal and most productive employees now redundant during the biggest economic and social crisis since the Depression – after having their redundancy entitlements stripped to the bone just days before the sale was first reported in the press. A greedy cash saving move that was clearly made in anticipation of this sale, despite what staff were explicitly told at the time. To the people responsible for that move, please know it will never be forgotten or forgiven. The months ahead will be interesting for all involved.
User ID not verified.
Yes, it is a sad day for a lot of employees of Pacific, including a little company called Impact Merchandising who is owned by Pacific and did merchandising for the business – around 140 employees will be made redundant next week. Thanks Seven West and Bauer, great timing !!
User ID not verified.
yeah but think of the seven employees (and even potentially Bauer) that’s jobs are potentially saved and a business that can now keep the lights for longer through this period with this $40million.
I wouldnt say greedy at all, i’d say it was necessary for 2 businesses to survive,
User ID not verified.
Stripping employees’ redundancy packages was necessary for Seven to keep the lights on? People are now facing not being able to pay their mortgages after Pacific pulled a fast one with this redundancy package move. Staff were told there were no plans for redundancies when the changes were made and just two days later the sale was in The Australian. Wealthy, insulated people will do well out of the sale. Ordinary people have been crushed under foot. People could end up on the street. At least Seven will have the millions now to keep producing high quality winners like Pooch Perfect. That will keep all the staff in work for sure…..
User ID not verified.
Hi Angel of Pain,
Seven West Media are currently trying to do the same with the printing and publishing employees at West Australian Newspapers, looking to strip all redundancy agreements, long service leave and other conditions back to NES levels, they keep telling us these need to be done for the business to survive etc.
But it always seems to be the workers on the shop floor and no mention of cuts to senior management.
They used to value their employees, that’s why there is many people with 20+ years service at the newspaper printing plant but those days are long gone.
User ID not verified.
Regarding Impact, most of the employees for this company owned by Seven West and who Bauer did not want as part of their deal as they have gone to an opposition merchandising company are casuals. Bauer were one of their clients up until a month ago but took their business elsewhere. The Impact team worked every Monday and Thursday to make sure the mags were put on show in the retail outlets nationally, most will take away a separation certificate – no redundancy as they are not entitled and in the current client have no chance of finding another job for probably the next 6 months. Good luck Bauer, what goes around comes around !
User ID not verified.
Pacific Magazines staff were constantly assured through the EBA negotiations that the stripping of redundancy entitlements was just an accounting tidy-up.
Nobody was targeted for redundancy.
They said.
Two days after the EBA was approved, the sale was announced.
Who would have thought?
User ID not verified.
Do not be fooled. They do not care about you. They will throw you on to the fire in the blink of an eye.
User ID not verified.
Does anyone really think this is going to go ahead now? Today is very different to December.
User ID not verified.
Oh it’s going ahead.
User ID not verified.
The print industry suffers because television is more costly to produce and the salaries are so high for presenters and producers, They should be cut, however their ego’s would be shot. Maybe after this change over Bauer may come out laughing with a new look and opportunities for new editors, contributors, journalists and photographers. They may have some BIG surprises up their sleeve. Wait and see?
User ID not verified.
Is there more information on how much redundancies have been reduced?
User ID not verified.
Disgusting
User ID not verified.
Disgusting? Try the word evil.
User ID not verified.