Seven West Media will be able to proceed with other M&A plans, now that the merger of its Pacific Magazines with Bauer Media has been given the nod.
Australian competition regulator the ACCC announced this morning it would "not oppose" Bauer's proposed acquisition of PacMags, after deciding the transaction was "not likely to substantially lessen competition in relevant markets".
The sale will improve Seven's debt position and allow it to proceed with strategic acquisition plans signalled by the owning Stokes family earlier this month.
The agreed deal provides Seven with about $40 million cash, with chief executive James Warburton also pointing to $6.6 million of advertising Seven will receive from Bauer over three years. PacMags Better Homes & Gardens print magazine supports the broadcaster's free-to-air television show.
For Bauer, the go-ahead could revive interest from private equity group Mercury which abandoned plans to buy it because of the ACCC's position.
The ACCC had warned it might approve the deal, given that the two publishers overlap in their print and digital magazines and content. It identified "close competition" between Bauer's Woman's Day and Take 5, and Pacific Magazines' New Idea and That's Life!
ACCC chair Rod Sims said significant declines in the circulation and revenue experienced by many magazines were "sustained, substantial and likely to continue, resulting in less investment in content and fewer retail promotions.
"We note that some magazine titles have already closed, and others are likely to follow, regardless of this deal. We also note that the content offered by the four key magazine titles, including celebrity news, 'real life' stories, puzzles, and food, health and lifestyle tips, is all available from other sources.
"Ultimately, we determined that although there is 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."
Last month, ruling on a May 2019 story about Prince Harry and Meghan Markle, the Australian Press Council said readers of gossip magazines did not necessarily assume that everything they read was true, and that leeway should be granted for "factual exaggeration and inaccuracies".
You may not be getting all you can out of your browsing experience
and may be open to security risks!
Consider upgrading to the latest version of your browser or choose on below: