The ACCC announced today that it will not oppose the proposed acquisition of APN Outdoor Group Limited (ASX: APO) by JCDecaux SA or the proposed acquisition of Adshel Street Furniture Pty Ltd by oOh!media Limited (ASX: OML). The ACCC has been reviewing both acquisitions in the out-of-home advertising sector.
Out-of-home advertising, also known as “outdoor advertising”, includes advertising on billboards on the side of roads, on street furniture such as bus shelters and tram stops, on trains and buses, at train stations and leisure centres, and in airports and shopping malls.
“These transactions are between businesses that operate for the most part in complementary segments of out-of-home advertising,” ACCC Chair Rod Sims said.
“This is very different to the proposed tie-up in early 2017 between oOh!media and APN Outdoor, where the companies were in direct competition with each other,” Mr Sims said.
APN Outdoor’s strength is in large format billboards and airports, whereas JCDecaux operates essentially in street furniture, a category in which APN Outdoor does not operate.
Similarly, oOh!media’s strength is in the large format billboard, airport and retail categories, whereas Adshel’s main operations are in street furniture, a category in which oOh!Media does not operate.
“The information before us, including bidding data for sites, indicates that the respective merger parties rarely compete head-to-head,” Mr Sims said.
“Some market participants expressed some concerns, in particular about the possible anti-competitive bundling of different out-of-home categories. However, the major media agencies and large advertisers did not generally express strong concerns, and the ACCC considers that bundling is unlikely to have a significant impact on competition,” Mr Sims said.
“The merged companies will continue to compete with each other and with other out-of-home advertising providers. We consider that the options for advertisers and site owners will not change significantly and so neither of the proposed deals is likely to substantially lessen competition,” Mr Sims said.
JCDecaux is a global out-of-home advertising group. JCDecaux Australia is a wholly-owned subsidiary of JCDecaux SA, which is based in France. In Australia, JCDecaux operates primarily in street furniture.
APN Outdoor is an out-of-home advertising provider listed on the ASX since 2014. APN Outdoor offers advertising services from out-of-home sites in Australia and New Zealand. Its principal business is in large format billboards; it is also present in transport/transit advertising (including airports, rail sites and buses).
oOh!media is an out-of-home media company listed on the ASX. oOh!media offers advertising services at out-of-home sites in Australia and New Zealand, including billboards, retail advertising, location-based advertising including within office buildings, universities, pubs and cafes, fitness centres, and at airport sites.
Adshel is HT&E Limited’s (ASX:HT1) out-of-home advertising division. HT&E is a media and entertainment business listed on the ASX. HT&E was formerly listed as APN News & Media. Adshel offers advertising services at out-of-home sites in Australia and New Zealand, with a focus on street furniture.
In early 2017, the ACCC reviewed a proposed merger between oOh!media and APN Outdoor, which would have combined the two largest providers of out-of-home advertising in Australia, creating a market leader with over 50 per cent of all out-of-home advertising, and an even higher share in some segments, such as roadside billboards. The ACCC was concerned that this proposed merger would substantially lessen competition for advertisers, and also had concerns that the merger may damage the interests of site owners. It published a Statement of Issues on 4 May 2017. The parties abandoned their merger prior to the ACCC announcing its final decision.