The European Commission has opened an in-depth investigation to assess the proposed acquisition of Bonnier Broadcasting by Telia Company under the EU Merger Regulation. The Commission is concerned that the merged entity may shut out competitors from the audio-visual sector in Finland and Sweden.
Commissioner Margrethe Vestager, in charge of competition policy, said: “The in-depth investigation we are opening today aims to ensure that Telia’s proposed acquisition of Bonnier Broadcasting will not lead to higher prices for or less choice of TV channels for consumers in Finland and Sweden.”
As a retail TV distributor, Telia Company licenses TV channels (including ancillary rights) from TV broadcasters, such as Bonnier Broadcasting, to include them in its retail audio-visual offering. The proposed acquisition of Bonnier Broadcasting by Telia Company would create a vertically integrated player in the audio-visual industry in Denmark, Finland, Norway, and Sweden.
In Sweden and Finland, Bonnier Broadcasting is the owner of TV channels that are very important for TV distributors to have in the packages they offer consumers, namely its free-to-air and basic pay TV channels and premium pay TV sports channels.
The Commission’s initial market investigation identified the following main concerns:
At this stage, the Commission is in particular concerned that, following the transaction, consumers in Finland and Sweden would face reduced choice and higher prices for retail TV distribution.
The Commission will now carry out an in-depth investigation into the effects of the transaction to determine whether its initial competition concerns are confirmed.
The transaction was notified to the Commission on March 15th 2019. The Commission now has 90 working days, until September 19th 2019, to take a decision. The opening of an in-depth investigation does not prejudge the outcome of the investigation.
On April 12th 2019, Telia Company submitted commitments to address the Commission’s concerns. However, the Commission considered these commitments insufficient to clearly dismiss its serious doubts as to the transaction’s compatibility with the EU Merger Regulation.
“A phase 2 investigation into the acquisition of Bonnier Broadcasting is fully in line with our expectations and we now look forward to continuing the constructive dialogue with the European Commission,” commented Jonas Bengtsson, General Counsel at Telia Company. “We’re confident that any concerns following the in-depth investigation will be resolved.”
Telia Company announced the acquisition of Bonnier Broadcasting including brands TV4 in Sweden, Finnish MTV and C More which operates in both countries, from Bonnier AB for SEK 9.2 billion (€0.89bn) on a cash and debt free basis, on July 20th, 2018. The acquisition is fully in line with Telia Company’s strategy and ambition to offer more to the customers, and combines Telia Company’s leading mobile and fixed network with one of the most successful commercial media-houses in the Nordics.
Telia Company expects to be able to complete the acquisition of Bonnier Broadcasting during the second half of 2019.