Competition Watchdog Notes Potential Problems With Proposed TV Takeover Deal

By , 07 Nov 2018, 19:00 PM Business
Competition Watchdog Notes Potential Problems With Proposed TV Takeover Deal Flickr - Marco Verch CC-by-2.0

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STA, 7 November 2018 - The Slovenian competition watchdog has pinpointed several potential issues with the proposed takeover of Slovenia's biggest commercial broadcaster by cable operator United Group as it issued a statement of objections on Wednesday as part of its regulatory review of the takeover.

The takeover of Pro Plus, which operates several commercial TV channels, could lead to horizontal concentration on the TV advertising market, the market for TV sports rights, and the wholesale of children's TV programmes, the Competition Protection Agency (AVK) said.

It also raises the prospect of permanent concerted action with other operators on the market and the possibility of licenses for the distribution of Pro Plus channels increasing. Competitive programmes in the bundles of United Group's Slovenian cable operator Telemach could be sidelined as well.

Finally, the acquisition could have other effects since "the combined company would acquire sensitive business information about their competitors, would give it a significant competitive edge," the document reads.

These preliminary findings do not prejudge the agency's final decision and United Group has 45 days to submit remarks in its favour.

As the agency points out, it may also propose "corrective measures eliminating serious suspicion about the conformity of the concentration with competition rules."

United Group said today that it was already drawing up its remarks. "We do however expect that the final decision will be in conformity with EU competition law."

Former AVK director Andrej Krašek commented on the statement for the STA, saying that such statements were usually issued when the watchdog intended to reject a takeover.

Krašek believes that, considering the facts presented to far, the AVK will reject the takeover, and it could be convinced to do the opposite only by large structural measures.

"The agency has examined the actual state and collected evidence, and the procedure is nearing its end. The acquirer has 45 days to state new facts to prove that the concentration is in live with the law."

But Krašek believes that, as the procedure has started a year and a half, United Group probably does not have much new evidence.

The biggest media takeover in Slovenian history is being closely watched.

Domestic media players and media experts have expressed fears that it may lead to excessive concentration of power in the hands of a single, US-owned media group.

United Group, meanwhile, has been berating the regulator for the long duration of the procedure.

Pro Plus not only owns two of the most popular TV channels, POP TV and Kanal A, it also operates several cable-only channels, a pay-per-view service, and, one of the top news portals in the country.

United Group acquired the media portfolio of the Central European Media Enterprises (CME) in Slovenia and Croatia, which includes Slovenia's Pro Plus, last July. The entire deal has been estimated at EUR 230m.

United Group is owned by the Kohlberg Kravis Roberts (KKR) investment fund and the European Bank for Reconstruction and Development (EBRD), but an agreement was reached last month to sell a majority stake to the international investment firm BC Partners.

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