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French broadcasters abandon anti-Netflix merger deal

By Geert De Clercq and Mathieu Rosemain

PARIS (Reuters) – France’s two biggest private broadcasters, M6 Group and TF1, abandoned their merger plan to stave off the rise of US streaming platforms, saying antitrust filings rendered the deal irrelevant.

If successful, the deal would have changed the French television landscape and redefined the rules of competition related to the advertising market, setting a precedent in Europe and potentially paving the way for similar deals between traditional broadcasters.

“It appears that only structural remedies, including at least the divestiture of TV channel TF1 or TV channel M6, would be sufficient to authorize the proposed merger,” the two companies said in a statement on Friday, citing talks with them at the French company antitrust authority negotiated.

They added that the proposed merger no longer has any strategic rationale, although they continue to believe that a merger would have made sense given “the challenges posed by increased competition among international platforms”.

“The transaction could have created major competitive risks, particularly in the television advertising and television services markets,” France’s competition authority said in a statement online.

The merger, which would have given the combined company influence over three-quarters of the country’s television advertising, would also give it greater bargaining power over distributors such as internet service providers, said antitrust president Benoit Coeuré.

“The proposed commitments included in particular a separation of the advertising agencies of channels TF1 and M6,” said Coeuré, but added that the incentives to compete against each other would have been limited by the control of TF1 by its main shareholder, Bouygues.

Under the original merger plan, French conglomerate Bouygues would have controlled the merged group with a 30% stake, while M6’s parent company, German media group Bertelsmann, would be the second largest shareholder with 16%.

The companies have faced stiff opposition in recent months, including from media group Vivendi, owner of France’s largest pay-TV group Canal Plus, and telecoms maverick Iliad founder Xavier Niel.

The majority shareholders of TF1 and M6 announced their merger ambitions in May 2021.

(Reporting by GV De Clercq, Editing by Tassilo Hummel, Kirsten Donovan)

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