French broadcaster gives up anti-Netflix merger deal

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PARIS, Sep 16 (Reuters) – France’s two largest private broadcasters, M6 Group (MMTP.PA) and TF1 (TFFP.PA), scrapped their planned merger to fend off a resurgence of US streaming platforms, saying antitrust demands made the deal irrelevant.

If successful, the deal would change the landscape of French TV and redefine the rules of competition regarding the advertising market, setting a precedent in Europe and potentially paving the way for similar deals among traditional broadcasters.

“It appears that only structural improvements involving at least the divestment of TV channel TF1 or TV channel M6 will be sufficient to approve the proposed merger,” the two companies said in a statement on Friday, referring to the talks. held with the French antitrust authorities.

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They added that the proposed merger no longer had strategic reasons, although they continued to believe that the merger would make sense given the “challenges resulting from increased competition from international platforms.”

“Such transactions could create significant competitive risks, particularly in the television advertising market and distribution of television services,” the French competition authority said in an online statement.

The merger, which will see the combined entity control three-quarters of the country’s TV advertising, will also offer greater bargaining power with distributors, such as internet service providers, said antitrust watchdog president Benoit Coeuré.

“The proposed commitments include in particular the separation of advertising agency channels TF1 and M6,” Coeuré said, but added that incentives to compete with each other would be limited by the control of TF1 by its main shareholder, Bouygues (BOUY.PA).

Under the initial merger plan, French conglomerate Bouygues will eventually control the merged group with a 30% stake while M6’s parent, German media group Bertelsmann (BTGGg.F), will be the second largest shareholder with 16%.

The companies have faced stiff opposition in recent months, including from media group Vivendi (VIV.PA), owner of France’s largest pay-TV group Canal Plus, and founder of telecommunications maverick Iliad, Xavier Niel.

The controlling shareholders of TF1 and M6 announced their merger ambitions in May 2021. read more

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Reporting by GV De Clercq, editing by Tassilo Hummel, Kirsten Donovan

Our standard: Thomson Reuters Trust Principles.

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