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September 20, 2022

TF1 and M6 merger called off over regulator concerns

The prominent French commercial broadcasters have been forced to scrap their proposed tie-up, which was agreed upon last year.

By Tariq Saleh

France’s leading commercial broadcasters TF1 and M6 have abandoned plans to merge after refusing to meet the conditions set out by regulators for the deal to be approved.

The merger was set to go through by the end of the year but was delayed after the French Competition Authority began a review of the agreement.

Among several things, the regulator explored how the proposed tie-up would impact the acquisition of broadcast rights in France and the publishing and marketing of television channels.

The authority also identified several concerns with the deal, including the “significant market shares” the new entity would potentially command.

As a result, the merger has now been scrapped after TF1, which is owned by Group Bouygues, and M6, a subsidiary of European media titan RTL Group, failed to reach the necessary outcome with the authority following meetings on September 5 and 6.

This is despite the broadcasters claiming to have offered several “remedies” to gain the necessary regulatory approval to conclude the deal.

In a statement, TF1 and M6 said: “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. As a result, and in agreement with the other parties, Bouygues has 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.”

It was initially announced in May 2021 that TF1 and M6 had entered into exclusive negotiations to join forces.

The terms of that proposed deal included Bouygues paying €641 million ($640.5 million) for 11% of the merged company, increasing its stake to 30%. RTL would have retained 16%, with the remaining 54% of the merged group.

Bouygues was going to control the new company, with RTL serving as a strategic shareholder. The deal had been approved by the respective boards.

The merger would have resulted in the creation of a French broadcasting powerhouse comprising TV, radio, digital, content production, and technology assets, with €3.4 billion in annual revenue.

TF1 and M6 argued that the tie-up was necessary to meet the challenge presented by increasing influential global digital platforms, such as Netflix and Amazon.

In the midst of the proposed merger, TF1 and M6 have continued to acquire major sports rights in the country in recent months.

In July, TF1 secured exclusive rights to cover the France men’s national soccer team matches until the end of the 2027-28 season.

That agreement came after TF1 and M6 agreed on a contract to show France’s matches in the 2022-23 UEFA Nations League in May.

M6 and TF1 share rights to France’s various qualification matches for top-tier tournaments and last year agreed to share rights to the delayed 2020 European Championship in a deal worth €50 million.

The pair also have an agreement to share a package of 25 matches for the 2024 European Championships.

In a separate deal, rights to the 2022 FIFA World Cup later this year – in Qatar across November and December – are held jointly in France by TF1 and pay-TV’s BeIN Sports.

TF1 also holds free-to-air rights to the Champions League final until the 2023-24 season.

M6, meanwhile, secured FTA rights to the Champions League final for the 2024-27 period in a deal worth €4 million per year.

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