Macquarie Bank Limited (MBL) has entered into agreements to acquire a significant number of commercial radio broadcasting stations owned by RG Capital Radio Limited and DMG Regional Radio Pty Ltd. The proposed acquisitions involve MBL acquiring commercial radio licences in 44 commercial radio licences areas throughout Australia. In 39 of those licence areas, there was no overlap between the RG licences and the DMGRR licences. In the remaining 5 licence areas (Albury, Cairns, Mackay, Rockhampton and Townsville) MBL would acquire a significant proportion of the allocated commercial radio licences.
The ACCC was concerned that the acquisitions would result in a substantial lessening of competition in the local markets for advertising on commercial broadcast radio within the Albury, Cairns, Mackay, Rockhampton and Townsville radio licence areas. In particular, the ACCC was concerned that the acquisitions would result in Macquarie owning 100% of the commercial broadcast radio stations in Albury, Rockhampton and Townsville and 75% of the stations in Cairns and Mackay. The ACCC also took into account: the significant barriers to entry, with a major barrier being the availability of broadcast radio licences in the relevant licence areas; the limited availability of cost effective substitutes for radio advertisers; and the fact that advertisers were considered to exert little countervailing power to constrain the merged entity.
Following the offering of court enforceable undertakings requiring MBL to divest a number of radio stations, the ACCC decided on 8 September 2004 that it would not intervene in the acquisitions. The Undertakings require the divestiture of one commercial radio broadcasting station in each of Albury, Cairns and Mackay and two stations in each of Rockhampton and Townsville.
The Commission is satisfied that the Undertakings address the competition concerns and are sufficient to ensure that the proposed acquisition would not be likely to be a breach of s50 of the Trade Practices Act 1974.
