France’s two leading commercial broadcasters M6 and TF1 have unveiled plans to merge.
The pair, which have already partnered on streaming service Salto along with pubcaster France Télévisions, announced that the proposed merger would create a French media group “with the broadest TV, radio, digital, content production and technology offering to the benefit of all viewers and the French audiovisual industry.”
The proposed company would accelerate the development of a “French streaming champion” through the combination of catch-up services MyTF1 & 6play, along with the creation of a standalone SVOD service.
In addition to a focus on streaming, a statement from the companies outlined plans for a production hub for local and international content across all media segments, with the ambition to grow global content sales.
Bertelsmann-owned M6 and TF1 added that the combination of the companies and their associated brands “ is critical to ensure the long-term independence of French content creation and to continue to offer diversified and premium local content to the benefit of all viewers.”
The group would have a combined €3.4bn ($4.15bn) in revenue and current operating profit of €461m. The as-yet unnamed company will be backed by Groupe Bouygues and Bertelsmann’s RTL Group, holding respectively 30% and 16% each.
As part of the deal, Groupe Bouyges will pay €641m to RTL to acquire an additional 11% of the new company, leaving the German media giant with its 16% stake.
The companies said the deal would create synergies of between €250 and €350m per year within three years from closing of the transaction, which is planned for year-end 2022.
A proposed board of directors will consist of 12 members, including four designated by Groupe Bouygues, two from RTL Group, three independents and two directors representing the employees. One director will represent the employee shareholders.
Groupe M6 CEO, Nicolas de Tavernost, has been proposed as chairman & CEO of the merged entity, while Groupe TF1 chief Gilles Pélisson will be nominated as deputy CEO of Groupe Bouygues, in charge of media and development.
Pélisson said the merger would create “a French total video champion that will guarantee independence, quality of content, and pluralism – values that have long been shared by our two groups. It will be an asset in promoting French culture.”
De Tavernost, who alluded to the rapid growth of global streamers such as Netflix in France, added: “The consolidation of the French television and audiovisual markets is an absolute necessity if the French audience and the industry as a whole are to continue to play a predominant role in the face of exacerbated international competition, which is accelerating rapidly.
“The combination of the two groups’ know-how will allow for an ambitious French response. Furthermore, this proposed merger of Groupe M6 and Groupe TF1 is the only transaction offering value creation for all Groupe M6 shareholders.”
Traders have reacted positively to the news, with shares of both companies jumping up early on Tuesday. TF1 shares have increased by 10%, while M6 Groupe’s shares are up by over 7%.