What was set to be the outdoor industry’s big new behemoth – the $1.6 billion merger between its two biggest players APN and oOh!media – is no more after the two companies decided to pull the pin on the marriage this morning.
Although exact details of why the deal sunk are unclear, it’s believed The Australian Competition and Consumer Commission (ACCC) – who were investigating the merger – probably would have deemed it uncompetitive and not approved it anyway.
A joint statement by the two companies this morning to the Australian Security Commission read: “APN Outdoor and oOh!media disagree with the ACCC’s views. Both parties maintain that the commercial reality is that out-of-home advertising competes extensively and directly with other media channels and as such a narrow market definition is inappropriate.”
If the merger were to have gone ahead, the newly formed company would have controlled over 50 per cent of the market, including highly prized sites in Sydney and Melbourne, including international airports.
It’s believed other OOH operators had petitioned the ACCC sighting the un-competitive nature of any merger. It was also thought the marriage of the industry’s two biggest players would’ve created bigger costs for advertisers and agencies.
The ACCC was to hand down its final verdict on July 6th, although that will no longer happen.
All the commentary out of the ACCC had been negative and earlier this month it issued a statement listing a host of concerns.
ACCC chairman Rod Sims said at the time: “The ACCC’s preliminary view is that the merger is likely to substantially lessen competition in the out-of-home advertising market. The loss of competition could result in increased prices for advertisers, or lower levels of service, quality, or innovation.”
B&T had approached the industry body the OMA who have declined to comment on the matter ever since the merger was first proposed back in December.
So, it would appear the two protagonists simply decided to fall on their respective swords than wait for the bad news in six weeks’ time.