Ooh Media APN Outdoor merger in doubt after ACCC warns of competition issues

The Australian Competition and Consumer Commission has warned it has serious concerns about the merger of out-of-home companies Ooh Media and APN Outdoor after reviewing preliminary submissions.

Calling for further submissions ahead of its final decision on July 6, the competition and consumer watchdog said competitors to APN and Ooh had raised major concerns about the impact on the market.

“Many industry participants have competition concerns in relation to the merger,” ACCC chairman Rod Sims said.

“It will combine the two largest providers of out-of-home advertising in Australia, creating a market leader with over 50% of all out-of-home advertising, and an even higher share in some segments, such as roadside billboards.”

The update on the review process noted that the merged Ooh-APN Outdoor business would be the only out-of-home provider with a presence in all categories of out-of-home advertising.

“Other out-of-home providers have significantly smaller market shares and tend to focus on particular categories of out-of-home advertising,” the statement said.

The merger, if approved, would see an outdoor giant created with a market capitalisation of more than $1.6b and a national network of billboards, shopping centres, street furniture and digital sites.

Sims went further to warn that the deal could also lead to increased prices for advertisers.

“The ACCC’s preliminary view is that the merger is likely to substantially lessen competition in the out-of-home advertising market,” Sims said.

“The loss of competition could result in increased prices for advertisers, or lower levels of service, quality, or innovation.

“Further, the ACCC is concerned the merger may damage the interests of site owners, who rely on competition between APN Outdoor and Ooh Media to obtain the maximum rent for their sites.

“Industry participants have also raised concerns that the combined APN Outdoor/Ooh Media will be able to squeeze competitors out of the market, by bundling billboards, where it has a dominant position, with other forms of out-of-home advertising.”

The ACCC had already pushed its determination date back to May 4 and has now nominated July 6 for the decision as it waits for further submissions.

In a statement to the ASX, APN Outdoor and Ooh Media said they would continue working with the ACCC.

“The SOI is a preliminary view by the ACCC of its investigations into the proposed transaction,” the statement said.

“APO and OML will continue working with the ACCC with a view to addressing the matters it has raised today. We are currently considering next steps, including impacts on the proposed transaction timeline.”


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