Reach Plc & Northern & Shell
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Reach plc & Northern & Shell Phase One Examination Report 27/11/18 Prepared by the Department of Communications, Climate Action and Environment www.dccae.gov.ie Table of Contents Table of Contents ...................................................................................................... i 1. Background ..................................................................... 1 The Purchaser: ............................................................................................. 1 The Target: ................................................................................................... 3 Media Sector ............................................................................................................ 3 The Purchaser: ............................................................................................. 4 The Target: ................................................................................................... 5 2. Application of the Relevant Criteria & s. 28D (2) of the Competition Act ........................................................................ 7 Significant Interests ................................................................................................. 7 The Purchaser: ............................................................................................. 8 The Target: ................................................................................................... 9 Impact: ......................................................................................................... 9 Relevant Media Assets ........................................................................................... 10 The Purchaser: ........................................................................................... 10 The Target: .................................................................................................. 11 Impact: ........................................................................................................ 11 Ownership and Control ......................................................................................... 12 Relevant Media Assets: .............................................................................. 12 Regulatory Oversight: ................................................................................ 12 Proposed Changes: ..................................................................................... 13 Impact: ....................................................................................................... 13 Market Share ......................................................................................................... 13 The Purchaser: ........................................................................................... 14 The Target: ................................................................................................. 19 Brand & News Reach: ................................................................................ 19 Media Merger – Parties; Examination - i - The Views of the Parties ............................................................................. 20 Impact: .......................................................................................................20 Governance and Editorial Management ................................................................ 22 Compliance and Ethics .............................................................................. 23 Editorial Ethos ........................................................................................... 24 Impact ........................................................................................................ 24 Content – Diversity ................................................................................................ 24 The Purchaser ............................................................................................ 24 The Target .................................................................................................. 25 Impact ........................................................................................................ 27 Financial ................................................................................................................ 28 The Purchaser: ........................................................................................... 28 The Target: ................................................................................................. 28 The Views of the Parties ............................................................................. 28 Impact: ....................................................................................................... 29 Impact on the Irish Language ................................................................................ 29 Impact: ....................................................................................................... 29 The scale and reach of RTÉ and TG4 ..................................................................... 29 Impact: .......................................................................................................30 The Views of the CCPC/European Commission .................................................... 31 The Views of the Undertakings Involved ............................................................... 33 3. Summary of the Application of the Relevant Criteria & s. 28D (2) of the Competition Act ................................................ 35 4. Conclusion ..................................................................... 39 Media Merger – Parties; Examination - ii - 1. Background 1.1 The proposed transaction involves the acquisition by Reach plc (formerly Trinity Mirror plc) (the Purchaser) of the entire issued share capital of both Northern & Shell Network Limited (N&S) and International Distribution 2018 Limited (IDL) and 50% of the issued share capital of Independent Star Limited (ISL) (together the Target Group) (Proposed Transaction)1. 1.2 The proposed transaction is to be implemented pursuant to the terms of a Share Purchase Agreement (SPA) between the parties, dated 9 February 20182. 1.3 The Proposed Transaction is also subject to conditions submitted by Reach to the Competition and Consumer Protection Commission (CCPC). The proposed conditions submitted by Reach are adopted as part of the CCPC approval of this merger and are to prevent any direct or indirect exchange of competitively sensitive information between: (i) Reach and Independent News & Media (IN&M); (ii) Reach and ISL; and (iii) ISL and IN&M following Completion (arising from the acquisition by Reach of 50% of the issued share capital of ISL) which would constitute a breach of section 4(1) of the Competition Act 2002, as amended (the Act)3. 1.4 The Parties are making a joint notification4. 1.5 The Purchaser acquired N&S’s publishing assets, excluding those in the State, on 28 February 20185. The Purchaser: 1.6 The Purchaser rebranded from Trinity Mirror plc to Reach plc as of 3 May 20186. 1 Trinity Mirror/ Northern & Shell, Media Merger Notification Form p. 2 2 Confidential Annex 2.5 (a) Share Purchase Agreement 3 CCPC Determination of Merger Notification M/18/016 - Trinity Mirror /Northern & Shell p. 2 4 Trinity Mirror/ Northern & Shell, Media Merger Notification Form p. 5 5 Annex 6.2.1 Trinity Mirror Annual Report 2017 6 Trinity Mirror/ Northern & Shell, Media Merger Notification Form p. 2 Media Merger – Parties; Examination - 1 - 1.7 The Purchaser is a newspaper publishing group that is a public limited company with shares admitted to trading on the London Stock Exchange. It publishes national, regional and local newspapers in the UK and, in the State it publishes the Irish Mirror, the Irish Sunday Mirror, the Sunday People, the Daily Record, the Sunday Mail, RSVP magazine, and operates www.irishmirror.ie, www.dublinlive.ie and www.rsvplive.ie8. 1.8 In the State, the Purchaser is active in the Publishing and Internet Media sectors through the publication of newspapers and the provision of online news offerings9. 1.9 The Purchaser has a 21.53% shareholding in PA Group Limited (PA Group)10. 1.10 The PA Group is a national news agency in the UK and Ireland and a cross platform provider of news content. The Parties maintain in their notification that the PA Group is not a media business as the “PA Group does not publish any newspaper or periodicals, in print, on the internet or otherwise for the purposes of paragraph (a) of the definition. PA Group does not transmit, re-transmit or relay any broadcasting service under paragraph (b) of the definition. Please note further that PA Group does not consist "substantially of news and comment on current affairs” for the purposes of paragraph (a), (c) or (d) of Section 28A(1) of the 2002 Act. As explained above, PA Group only provides source materials and the information supplied by PA Group is “raw”, purely factual and provided without comment on current affairs. It is for the news providers who purchase the services from PA Group to reflect their comment on the information supplied. PA Group are not in any way involved in the preparation or formulation of comment which is carried out entirely by the purchasing client”11. The definition referred to in the quotation above is contained in section 28A(1) of the Competition Act 2002 (as amended). 7 Trinity Mirror/ Northern & Shell, Media Merger Notification Form p. 2 8 Ibid. 9 Ibid. 10 Trinity Mirror/ Northern & Shell, Media Merger Notification Form p. 7