Toohil Telecom Holdings Limited & Eircom Holdco SA
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Toohil Telecom Holdings Limited & Eircom Holdco S.A. Phase One Examination Report 06/03/2018 Table of Contents Table of Contents ..................................................................................................................i 1. Background ........................................................................................... 1 The Purchaser: ....................................................................................................... 1 The Target: ............................................................................................................. 1 Media Sector ....................................................................................................................... 2 The Purchaser: ....................................................................................................... 3 The Target: ............................................................................................................. 4 2. Application of the Relevant Criteria & s. 28D (2) of the Competition Act 5 Significant Interests ............................................................................................................ 5 The Purchaser: ....................................................................................................... 6 The Target: ............................................................................................................. 7 The Views of the Parties: ....................................................................................... 7 Impact: ................................................................................................................... 7 Relevant Media Assets ........................................................................................................ 8 The Purchaser: ....................................................................................................... 8 The Target: ........................................................................................................... 10 Impact: ................................................................................................................. 10 Ownership and Control ..................................................................................................... 10 Relevant Media Assets: ........................................................................................ 10 Regulatory Oversight: .......................................................................................... 11 Proposed Changes: ............................................................................................... 11 Impact: ................................................................................................................. 11 Market Share .................................................................................................................... 11 The Purchaser: ..................................................................................................... 12 Media Merger – Toohil & Eircom; Review - i - The Target: ........................................................................................................... 12 The Views of the Parties: ..................................................................................... 13 Impact: ................................................................................................................. 13 Governance & Editorial Management .............................................................................. 14 Compliance & Ethics: ........................................................................................... 14 Editorial Ethos: ..................................................................................................... 14 Impact: ................................................................................................................. 15 Content ............................................................................................................................. 15 The Purchaser: ..................................................................................................... 15 The Target: ........................................................................................................... 15 The Views of the Parties ...................................................................................... 15 Impact .................................................................................................................. 16 Financial ............................................................................................................................ 16 The Purchaser: ..................................................................................................... 16 The Target: ........................................................................................................... 16 Impact: ................................................................................................................. 16 Impact on the Irish Language ............................................................................................ 17 Impact: ................................................................................................................. 17 The scale and reach of RTÉ and TG4 ................................................................................. 17 Impact: ................................................................................................................. 17 The Views of the European Commission .......................................................................... 17 The Views of the BAI ......................................................................................................... 18 The Views of the Undertakings Involved .......................................................................... 18 3. Summary of the Application of the Relevant Criteria & s. 28D (2) of the Competition Act ............................................................................................. 19 4. Conclusion........................................................................................... 23 Media Merger – Toohil & Eircom; Review - ii - 1. Background 1.1 The proposed media merger involves the acquisition of Eircom Holdco S.A. (the Target) by Toohil Telecom Holdings Limited (the Purchaser).1 In this document the Purchaser and the Target are collectively referred to as “the Parties”. 1.2 The proposed transaction is to be implemented pursuant to the terms of a Share Sale and Purchase Agreement (SSPA) between the Parties, dated 19 December 2017.2 This bid is subject to certain express conditions, including, amongst others, regulatory clearance in the State3. The Purchaser: 1.3 The Purchaser is a newly incorporated private company registered in the State4 and is not active in any media sector in the State. The Purchaser is ultimately controlled by the French businessman, Xavier Niel.5 This control is conferred through his control of the NJJ Group (NJJ), a private investment group owned by Mr Niel which operates primarily in France in the Broadcasting, Publishing and Internet Media sectors, and Iliad S.A. (Iliad), a large telecommunications company founded by Mr Niel and of which he is the controlling shareholder6, which operates primarily in France in the Broadcasting sector. 1.4 As the Purchaser proper is merely the purchasing vehicle for Mr Niel it is necessary to assess it together with both NJJ and Iliad in this examination. Therefore, any further reference to the Purchaser in this examination shall be construed as referring to those companies controlled by Mr Niel, i.e. Toohil, NJJ and Iliad, in aggregate. The Target: 1 Toohil & Eircom, Merger Notification Form, p. 1 2 Toohil & Eircom, Annex 7, Share Sale and Purchase Agreement 3 Ibid, p. 12-13. 4 Toohil & Eircom, Merger Notification Form, p. 2 5 Ibid, p. 1 6 Ibid Media Merger – Toohil & Eircom; Review - 1 - 1.5 The Target is a société anonyme7 registered in the Grand Duchy of Luxembourg. The Target is a large telecommunications company active in the Broadcasting Sector in the State primarily through the operation, through its subsidiary Eircom Holdings Ireland Limited (EHIL), of a television broadcasting platform and a number of television channels.8 Media Sector 1.6 Media Mergers, as defined in s. 28A of the Competition Act 2002 (as amended) (the Competition Act), refers to those undertakings which “carry on a media business” in the State. A “media business” is defined in the Competition Act as follows: (a) ‘media business’ means the business (whether all or part of an undertaking’s business) of— (i) the publication of newspapers or periodicals consisting substantially of news and comment on current affairs, including the publication of such newspapers or periodicals on the internet, (ii) transmitting, re-transmitting or relaying a broadcasting service, (iii) providing any programme material consisting substantially of news and comment on current affairs to a broadcasting service, or (iv) making available on an electronic communications network any written, audiovisual or photographic material, consisting substantially of news and comment on current affairs, that is under the editorial control of the undertaking making available such material; 1.7 Furthermore, the current Guidelines on Media Mergers (the Guidelines) provides the following supplementary definition of a “media sector”: 7 A civil law construct that is roughly equivalent to a public limited company. 8 Toohil & Eircom,