Another step has been taken towards the completion of the Austereo takeover. The Australian Competition and Consumer Commission has given the thumbs up to the deal, saying it “will not oppose the proposed acquisition.” The ACCC reviewed the proposal under section 50 of the Competition and Consumer Act 2010, which prohibits mergers that would have the effect of substantially lessening competition in a market, and found no reason to object. Southern Cross Media CEO Rhys Holleran has told radioinfo: “This is an important step in relation to this transaction and we are pleased to have recevived the ACCC news release that they will not oppose the proposed transaction.”
The competition regulator looked at the deal from a number of viewpoints: the advertising market, content and syndication. Further regulatory hurdles still to be jumped include the shareholder approval process and broadcast regulator ACMA’s scrutiny of the proposal in regards to licence areas and other matters relating to the Broadcasting Act.
Southern Cross owns and operates commercial radio stations and commercial free-to-air television stations in regional Australia. Austereo operates commercial radio stations in metropolitan areas in Australia and supplies syndicated radio content to radio broadcasters in regional Australia. The merger parties are also buyers of radio content from content providers.
The merger parties’ radio and television licences do not currently overlap except for the radio licences held in Brisbane and the Sunshine Coast, which allows both parties to broadcast within that region.
ACCC chairman Graeme Samuel says “a large number of parties were consulted in the ACCC’s review, including competitors, content providers, advertising agencies and businesses that advertise in the Brisbane and Sunshine Coast regions.”
The ACCC found that in the Brisbane and the Sunshine Coast area there were a number of competitors for the supply of advertising opportunities and the supply of content to consumers. Due to the presence of existing competitors, the proposed acquisition “would not be likely to substantially lessen competition in any other markets where Southern Cross and Austereo operate. These include advertising markets across other regions of Australia and the supply and acquisition of radio broadcasting content,” says Samuel.
The ACCC notes that in addition to its review, the Australian Communications and Media Authority will conduct a review to determine whether the proposed acquisition would breach the Broadcasting and Services Act 1992. Section 54 of the BSA prohibits an entity from controlling more than two radio licences in a radio licence area and certain remedies, such as divestiture of a radio licence, may be required to rectify a breach.