Hoyts Multi-Plex Cinemas Pty Limited - s.87B undertaking

Company or individual details

  • Hoyts Multi-Plex Cinemas Pty Limited
    006 564 585
  • The Greater Union Organisation Pty Limited
    000 024 439
  • Birch Carroll & Coyle Limited
    009 659 643
  • Village Cinemas Australia Pty Limited
    006 735 002
  • Entertainment of the Future Pty Limited
    066 861 514
  • Val Morgan and Co (Aust) Pty Limited
    004 806 857
  • Media Entertainment Group Limited
    007 290 539
  • Independent Cinema Advertising Pty Limited
    060 535 882
  • Val Morgan Holdings Pty Limited
    102 805 756

Undertaking

Hoyts, Greater Union and Village ('the Acquiring Exhibitors') propose to acquire Val Morgan and its associated entities.

The Commission conducted market enquiries and examined submissions from the parties and considered that it appeared that the proposed acquisition would have led to a substantial lessening of competition in the markets for cinema advertising and cinema exhibition in Australia, The main reason for the Commission's concern was that the acquisition would further vertically integrate the Acquiring Exhibitors, giving them effective control over an important revenue source for all cinema exhibitors. It was considered unlikely that actual or potential competition would constrain the Acquiring Exhibitors in this respect. The Commission therefore decided that the acquisition was likely to substantially reduce competition in breach of section 50.

The Acquiring Exhibitors offered an enforceable Undertaking to address the Commission's competition concerns. This Undertaking requires:

  • two of the Acquiring Exhibitors will divest their stake in Val Morgan within 18 months of the acquisition;
  • the Undertakings will remain in force until such time as the existing contracts between Val Morgan and the divesting exhibitors remain in force. Such contracts are, in any case, limited in the Undertakings to 12 months in duration;
  • Val Morgan honour existing contracts and will guarantee to offer new cinema advertising contracts to independent cinema exhibitors; and
  • Val Morgan will guarantee minimum contractual terms to be offered to independent cinema exhibitors.

The Undertaking also incorporates procedures and checks to ensure the independent exhibitors are dealt with fairly. The Commission considered that this Undertaking would address the competition concerns and decided not to oppose the acquisition.

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