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ACCC concerns over APN/oOh!media merger

Thursday, 04 May 2017
By Print21

Corporate regulator the Australian Competition and Consumer Commission (ACCC) is concerned that a proposed merger of APN Outdoor and oOh!media would ‘substantially lessen competition’ in the outdoor advertising market.

The ACCC has released a Statement of Issues (SOI) that expressed ‘preliminary concerns’ about the proposed merger and invited further submissions from interested parties before 19 May.

'Could result in increased prices for advertisers,': Rod Sims, chairman ACCC

“Many industry participants have competition concerns in relation to the merger,” said ACCC chairman Rod Sims. “It will combine the two largest providers of out-of-home advertising in Australia, creating a market leader with over 50 per cent of all out-of-home advertising, and an even higher share in some segments, such as roadside billboards.”

Out-of-home advertising, also known as outdoor advertising, includes advertising on billboards on the side of roads, bus shelters, train stations, trains, taxis and buses, at leisure centres, public toilets, shopping malls and supermarkets, said the ACCC statement.

The merged firm 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 ACCC’s preliminary view is that the merger is likely to substantially lessen competition in the out-of-home advertising market,” said Sims. “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 again postponed its final decision on the merger, which is now due on 6 July 2017. A decision was previously expected in March, then on 4 May.

APN Outdoor and oOh!media today released a joint statement to the ASX in response to the ACCC’s SOI.

The SOI is a preliminary view by the ACCC of its investigations into the proposed transaction. 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.

APN Outdoor Group Limited and oOh!media Limited are Australia’s two largest suppliers of out-of-home advertising services. They are both listed on the Australian Securities Exchange and have operations in Australia and New Zealand.

The ACCC’s 27-page SOI can be viewed in the link below.

MER17+5085.docx

 

 

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