France’s TF1 & M6 abandon merger plans

Bouygues, RTL Group, Groupe TF1 and Groupe M6 have called off their plan to merge the TF1 and M6 groups.

The decision to abandon the merger, which was originally announced in May last year, came after  the parties appeared at the hearings of the French Competition Authority’s board on 5 and 6 September to argue in favour of the benefits and necessity of the deal.

“Following the debates with the Authority and despite the additional remedies proposed, it appears that only structural remedies involving at the very least the divestment of the TF1 TV channel or of the M6 TV channel would be sufficient to approve the proposed merger. The parties have therefore concluded that the proposed merger no longer has any strategic rationale,” the parties said in a statement.

As a result, TF1 owner Bouygues, in agreement with the other parties,  decided to end the review of the transaction by the Competition Authority.

“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. 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 parties said.

The abandonment of the plan to merge Bouygues-owned TF1 with RTL’s M6 came after intensive moves to provide a set of remedies to secure approval.

Initial concessions included a promise to keep their advertising businesses separate for three years after their merger in an attempt to secure regulatory approval of the fusion

The two broadcasters also reportedly offered to keep their radio advertising businesses separate, to limit the distribution of French films on the combined companies’ channels and to extend by one year their distribution agreements with service providers such as Canal+, Orange, Free and SFR, among other concessions.

The groups were later reported to have gone further, offering to keep their advertising businesses separate for longer – potentially up to five years rather than three.

They were also reportedly ready to extend the separation of the businesses to cover digital channels such as TMC, TF1 Séries Films and Gulli as well as the flagship TF1 and M6 national channels.

The failure of the merger will please opponents such as service provider Free, which argued that the pair should not be allowed to merge because the combined entity would control 75% of the French TV advertising market.

Others, such as Altice Group were broadly in favour, hoping to be able to purchase digital channels that the combined group offered to sell.