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Shares in France's TF1, M6 Fall After Merger Plans Scrapped

Published 19/09/2022, 08:26 pm
© Reuters.

By Scott Kanowsky -- Shares in Television Francaise 1 SA (EPA:TFFP) and M6 Group (EPA:MMTP), France's two largest private broadcasters, dropped on Monday after they called off a planned merger due to lingering antitrust concerns.

In a statement released late last week, the companies claimed the "strategic rationale" for the tie-up was eliminated because competition authorities in France demanded that any proposed deal included the divestment of either one of the TF1 TV or M6 TV channels.

"The parties regret that the Competition Authority did not take into account the speed and extent of the changes sweeping through the French broadcasting sector," the firms added. "They continue to firmly believe that a merger of the TF1 and M6 groups would have provided an appropriate response to the challenges resulting from the increased competition from the international platforms."

The combined entity of TF1 and M6 would have created a major new player in French television, and was seen as a possible answer to the surging popularity of U.S. streaming platforms like Netflix (NASDAQ:NFLX) and Amazon Prime.

However, French competition authorities warned that the merged business would have controlled as much as three-fourths of the country's television advertising market and given it greater sway in negotiations with distributors.

The watchdog also flagged that the role of mobile network operator Bouygues (EPA:BOUY) - TF1's main shareholder - in the merger would have limited competition between TF1 and M6. Bouygues would have assumed a 30% stake in the combined group under the terms of the deal, above a 16% holding for Bertelsmann SE & Co KGaA (F:BTGGg), M6's German parent.

Shares in Bouygues and Bertelsmann fell in late-morning European trading.

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