RTL Group has offered concessions to the European Union relating to its planned takeover of Sky Deutschland, in an effort to address competition concerns and speed up the approval process for the deal, Reuters reported this morning. Details of these concessions haven’t been disclosed, though sources close to the deal told Reuters that one option might be outsourcing ad sales to third parties.
An emailed statement from a European Commission spokesperson confirmed that commitments have been received, and the provisional deadline for the Commission to take a decision is now set for April 22nd.
The agreement will see RTL fully acquire Sky’s business in Germany, Austria, and Switzerland, including Sky Deutschland’s streaming platform WOW and its customer relationships in Luxembourg, Liechtenstein, and South Tyrol. The two companies say the deal, worth up to €527 million including a variable consideration based on RTL’s share price, will create a unique proposition across the region, combining RTL’s entertainment and news brands with Sky’s premium sports rights, which cover the Bundesliga, DFB-Pokal, Premier League, and F1.
RTL had repeatedly stated its confidence in being able to gain regulatory clearance for the acquisition since announcing the deal last June. However, it’s not rare to see a mismatch between the beliefs of TV businesses and regulators around what sorts of M&A pose an antitrust threat. While broadcasters find their revenues under competitive pressure from the international streaming giants and the wider set of ad-funded tech behemoths, antitrust investigators in some cases focus more narrowly on domestic TV advertising markets when assessing M&A.
Viewed through this lens, RTL’s tie-up with Sky Deutschland looks more consequential. As François Godard, Media and Telecoms Analyst at Enders Analysis, has previously told VideoWeek, the deal roughly doubles RTL’s size in Germany, representing a massive shift in the German TV market.
But the deal is an important one strategically for RTL, its largest since the company formed in 2000 through a merger of CLT-UFA and Pearson Television, hence its apparent willingness to offer concessions to try to push through a prompt approval. The question remains how far the European Commission will need RTL to go to alleviate concerns. The company’s previous effort to sell its French TV group M6 via a merger with TF1 a few years back was killed by the regulatory process — while France’s competition regulator was open to the deal, the concessions required to gain clearance ended up being too costly for the merger to remain attractive.
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