ACCC raises concerns about Seven West (ASX:SWM) sale of Pacific Magazines

The ACCC has raised preliminary competition concerns about the proposed sale of Pacific Magazines (ASX:SWM) to Bauer Media, in a deal that would combine Australia’s two biggest magazine publishers.

The competition regulator is particularly concerned about the impact of the proposed acquisition on some key weekly magazine titles. Bauer’s Woman’s Day competes closely with New Idea which is owned by Pacific Magazines, and Bauer’s Take 5 magazine competes strongly with Pacific Magazines’ That’s Life.

The ACCC says if Bauer bought Pacific Magazines, Bauer would remove its closest competitor in certain segments. Its preliminary view is that this would allow Bauer to reduce the effort put into content production and the range of content, or to increase prices.

The ACCC has published a statement of issues outlining its preliminary concerns. It invites submissions from interested parties by 14 February 2020.

In October this year, Seven West signed a binding agreement to sell Pacific Magazines to Bauer Media for a cash consideration of $40 million.

Both Seven and Bauer have responded to the statement, suggesting it is both “disappointing” and that the ACCC has taken an “overly narrow view”.
Shares in Seven West (ASX:SWM) are trading 1.5 per cent higher at 34 cents.

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Source: Finance News Network