Undertaking date

Undertaking type

s.87B undertaking

Reference number

D03/1321

Section

s. 50

Company or individual details

  • Name

    Hoyts Multi-Plex Cinemas Pty Limited

    ACN

    006 564 585
  • Name

    The Greater Union Organisation Pty Limited

    ACN

    000 024 439
  • Name

    Birch Carroll & Coyle Limited

    ACN

    009 659 643
  • Name

    Village Cinemas Australia Pty Limited

    ACN

    006 735 002
  • Name

    Entertainment of the Future Pty Limited

    ACN

    066 861 514
  • Name

    Val Morgan and Co (Aust) Pty Limited

    ACN

    004 806 857
  • Name

    Media Entertainment Group Limited

    ACN

    007 290 539
  • Name

    Independent Cinema Advertising Pty Limited

    ACN

    060 535 882
  • Name

    Val Morgan Holdings Pty Limited

    ACN

    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.

Attachments

Variations

current positiondatetitlevariation status
12 Nov 2003 Hoyts Multi-Plex Cinemas Pty Limited - variation - s.87B undertaking variation of original
13 Dec 2002 Hoyts Multi-Plex Cinemas Pty Limited - s.87B undertaking original