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Outdoor media mega mergers cleared by ACCC

Friday, 24 August 2018
By Wayne Robinson

Consolidation: outdoor media

Major consolidation in the outdoor media sector is to go ahead, with the ACCC giving APN Outdoor and oOh! Media the green light for their mergers with JC Decaux and Adshel respectively.

As a result of the ACCC’s decision oOh! Media will now spend $570m to buy Adshel, while French outfit JC Decaux will invest$1.12bn to buy APN Outdoor.

Both companies believe outdoor advertising has significant growth prospects, outdoor currently accounts for just six per cent of the country’s advertising spend, and has been on a non-stop growth trajectory for the past 15 years, save for two quarters at the height of the GFC.

Print – also known as classic or static – outdoor media is losing market share to digital, but is still growing its overall volumes and revenue, one of the few print sectors to be doing so.

Rod Sims, chairman of the ACCC says the two mergers did not present serious competitive issues, as the companies are operating in mainly ‘complementary’ sectors. Sims says other outdoor asset companies had expressed concerns over the deals, but major media agencies and advertisers had no such issues.

He said, “The merged companies will continue to compete with each other and with other out-of-home advertising providers. We consider that the options for advertisers and site owners will not change significantly and so neither of the proposed deals is likely to substantially less competition.”

The go-ahead comes just a year after the ACCC blocked a proposed merger between APN Outdoor and oOh! Media on the grounds that the a merger between the two businesses would create one dominant market player. Then APN itself bid to buy Adshel, for $540m, but was thwarted when oOh! stepped in with its higher offer.

Both oOh! and APN Outdoor have bought outdoor print businesses in the last couple of years, to give them an house production unit, with oOh! now owning Cactus Imaging and APN Outdoor owning GSP.

Both APN Outdoor and oOh! have just released their latest financials, with oOh! achieving double-digit revenue growth of 11 per cent, with improved gross margin and underlying earnings for the half-year ended June 30. Revenue from its in-house print provider Cactus Imaging continued to grow, demonstrating, says the company, its value to the group. The company bought Cactus – founded by Warwick Spicer and Keith Ferrel in 1992 – from Opus Group two years ago for $6.1m. APN Outdoor saw revenue for the half year rise by four per cent with underlying EBITDA up by seven per cent, with classic (print) revenue stable.

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