Australian Newsagency Blog

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Bauer urges ACCC to approve Pacific Magazines acquisition

Mark Fletcher
January 27th, 2020 · No Comments

The Australian today has the story from Leo Shanahan about Bauer Media asking the ACCC to approve the PacMags acquisition.

Bauer Media boss urges ACCC to permit merger with Pacific
Bauer Media’s Australian boss has pleaded with the ACCC to allow the takeover of Seven’s ­Pacific Magazines in the interest of the struggling industry, pointing to growing unregulated online competition backed by the findings of the watchdog’s own digital platforms inquiry.

The call by Bauer ANZ chief executive Brendon Hill comes in a week that The Australian revealed the German-based media conglomerate lost a private equity suitor after Mercury Capital pulled out of a reported $150m offer to buy the Australian arm of Bauer Media. The buyout would have proceeded only had the Pacific deal gone ahead, but last year the competition watchdog released a discussionpaper outlining several possible barriers to the $40m merger, voicing concerns over possible price rises and declining quality of the titles.

Although the ACCC statement of issues recognised online competition as an issue, Mr Hill said he was dismayed the watchdog viewed competition between Woman’s Day, New Idea, That’s Life and Take 5 as “the market”, given it recently completed a landmark review into the effect of digital platforms of traditional media.

At an industry function last year, just after the proposed acquisition was announced, the CEO of Bauer announced to those attending that no magazine titles would be closed as a result of the acquisition.

I don’t see any public benefit in the ACCC blocking the proposed transaction.

From a newsagent perspective, magazines are not as critical to our future as they were, say, ten years ago and their relevance is fading. They continue toe as important but are no longer critical to the success of many in the channel. This is why I say, from a newsagent perspective, there is no reason to block the acquisition.

I think changes like single day delivery and greater focus on mass retailers like supermarkets (to the detriment of newsagents) will come regardless of the proposed acquisition. I say this considering that supermarkets pay for magazines they sell and not net sales based one sale or return. Newsagents would benefit from such an arrangement. Instead, we have to live with sale or return and ourselves carry the cost of shrinkage. This advantages supermarkets – hence my concerns about an even stronger relationship with them.


Category: magazines

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