Case M.9416 - BOLLORE GROUP / M7 GROUP
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EUROPEAN COMMISSION DG Competition Case M.9416 - BOLLORE GROUP / M7 GROUP Only the English text is available and authentic. REGULATION (EC) No 139/2004 MERGER PROCEDURE Article 6(1)(b) NON-OPPOSITION Date: 05/09/2019 In electronic form on the EUR-Lex website under document number 32019M9416 EUROPEAN COMMISSION Brussels, 5.9.2019 C(2019) 6475 final PUBLIC VERSION In the published version of this decision, some information has been omitted pursuant to Article 17(2) of Council Regulation (EC) No 139/2004 concerning non-disclosure of business secrets and other confidential information. The omissions are shown thus […]. Where possible the information omitted has been replaced by ranges of figures or a general description. To the notifying party Subject: Case M.9416 – Bolloré Group/M7 Group Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/20041 and Article 57 of the Agreement on the European Economic Area2 Dear Sir or Madam, (1) On 31 July 2019, the European Commission received notification of a proposed concentration pursuant to Article 4 of the Merger Regulation by which Groupe Canal + SA (“Canal +” or the “Notifying Party”, France) acquires within the meaning of Article 3(1)(b) of the Merger Regulation sole control of the whole of M7 Group SA (“M7”, Luxembourg) (the "Transaction"). Canal + and M7 are collectively referred to as the "Parties".3 1 OJ L 24, 29.1.2004, p. 1 (the 'Merger Regulation'). With effect from 1 December 2009, the Treaty on the Functioning of the European Union ('TFEU') has introduced certain changes, such as the replacement of 'Community' by 'Union' and 'common market' by 'internal market'. The terminology of the TFEU will be used throughout this decision. 2 OJ L 1, 3.1.1994, p. 3 (the 'EEA Agreement'). 3 Publication in the Official Journal of the European Union No C 265, 07.08.2019, p. 6. Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË Tel: +32 229-91111. Fax: +32 229-64301. E-mail: [email protected]. 1. THE PARTIES (2) Canal + is a wholly-owned subsidiary of Vivendi SA and an indirectly solely controlled subsidiary of the Bolloré Group.4 Canal + offers pay-TV subscriptions in a number of countries worldwide, including France and Poland within the EEA, produces and distributes audio-visual content, broadcasts over 60 channels worldwide, some of which are broadcast within the EEA in France, Belgium and Poland, and is active in selling online and offline advertising space on its channels and digital pay-TV offers. Through its subsidiary Thema, Canal + is active as a wholesaler of TV channels across the EEA and worldwide. Canal + also provides fixed internet and telephone access to residential customers in the French overseas territories and in Poland. (3) M7 is a pay-TV retailer and has eleven pay-TV brands in eight EU Member States, namely in Austria, Belgium, Czechia, Germany, Hungary, the Netherlands, Romania and Slovakia. M7 is also active as a broadcaster of a TV channel in Czechia, Slovakia and Romania. M7 is also active as a wholesaler of TV channels in Germany. In addition, M7 resells some of the satellite transponder capacity that it purchases to TV broadcasters, the majority of which are suppliers of TV channels to M7. In Belgium, Hungary and the Netherlands, M7 also offers telephony and internet services alongside its retail pay-TV offering. M7 is solely controlled, through the holding company CDS Topco B.V., by the fund FPCI Astorg V, which is the indirect majority shareholder of M7. 2. THE CONCENTRATION (4) On 7 June 2019, Canal + International SAS, a wholly owned subsidiary of Canal +, on one side, and FPCI Astorg V and the other indirect shareholders of M7, on the other side, entered into a Sale and Purchase Agreement pursuant to which Canal + International SAS will indirectly acquire 100% of the share capital of M7. (5) The Transaction therefore constitutes a concentration pursuant to Article 3(1)(b) of the Merger Regulation. 3. EU DIMENSION (6) The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million5 (Canal + EUR […], M7 EUR […]). Each of them has an EU-wide turnover in excess of EUR 250 million (Canal + EUR […], M7 EUR […]), but they do not achieve more than two-thirds of their aggregate EU- wide turnover within one and the same Member State. The notified operation therefore has an EU dimension pursuant to Article 1(2) of the Merger Regulation. 4 As determined by the Commission in 2017 in case Bolloré/Vivendi, Vivendi is solely controlled by its minority shareholder Bolloré (Commission decision of 24 April 2017 in case M.8392 – Bolloré/Vivendi). Since the Commission’s 2017 decision, there have been no significant changes in Vivendi’s shareholder structure or shareholders’ voting patterns. Therefore, the Commission’s 2017 analysis remains valid (Form CO, paragraph 26). 5 Turnover calculated in accordance with Article 5 of the Merger Regulation and the Commission Consolidated Jurisdictional Notice (OJ C 95, 16.4.2008, p. 1). 2 4. RELEVANT MARKETS (7) The Transaction relates to all the levels of the TV value chain. Section 4.1 provides an overview of the TV value chain and the Parties' activities at each level of the value chain. The relevant product and geographic market definitions for each level of the TV value chain are subsequently discussed in Sections 4.2- 4.4. 4.1. Introduction: the TV value chain and the Parties’ activities (8) Audiovisual content for television (“TV content”) comprises all products (films, sports, series, shows, live events, documentaries, etc.) that are broadcast via TV.6 In previous decisions, the Commission has identified different activities in the TV value chain, namely: (i) the production, licensing and acquisition of TV content (including the supply of pre-produced TV content and commissioned TV content); (ii) the wholesale supply and acquisition of TV channels; and (iii) the retail provision of TV services to end customers.7 (9) Sections 4.1.1 to 4.1.3 further describe these levels of the TV value chain as well as provide an overview of the Parties' activities at each level in the EEA countries where they are active. 4.1.1. Production, licensing and acquisition of TV content (10) This upstream level of the value chain comprises the production of new TV content as well as the licensing of broadcasting rights relating to pre-existing TV content. TV content is either (i) used internally on own TV channels or retail TV services if TV content suppliers are vertically integrated and also active in the wholesale supply of TV channels and/or in the retail provision of TV services (that is to say, captive TV production); or (ii) licensed to third-party customers (that is to say, non-captive TV production). (11) Third-party customers are typically: (i) TV channel suppliers (TV broadcasters), which incorporate the TV content into linear TV channels, or (ii) content platform operators, which offer the TV content to end users on a non-linear basis (that is to say, Pay-Per-View ("PPV") or video on demand ("VOD")), including via non- traditional platforms, that is to say via internet or so-called Over-The-Top ("OTT") platforms.8 6 Commission decision of 25 June 2008 in case M.5121 News Corp/Premiere, recital 28. 7 Commission decision of 25 June 2008 in case M.5121 News Corp/Premiere, recital 28; Commission decision of 7 April 2017 in case M.8354 – Fox/Sky, recital 29. 8 VOD services can be further differentiated into three types. First, Subscription VOD ("SVOD") designates a service whereby the end user obtains the right to watch multiple titles during a designated time period, for instance one month, through a single payment. Second, Transactional VOD ("TVOD") designates a service whereby the end user obtains the right to watch a single selected title within a designated time frame, for instance within 24 hours, through a single payment. Third, PPV designates a service whereby the end user makes a payment to watch a single title that is being broadcast at a specific time, which is the same for all viewers. In the case of TVOD and SVOD, viewers can select, purchase and view the titles at times of their own preference, whereas in the case of a title available for PPV, viewers purchase the right to watch that title at the given time it is broadcast, which is the same for everyone (for instance, the right to watch the live broadcast of a football match can be purchased for PPV). 3 (12) TV broadcasters and TV distributors who source TV content for their TV channels or retail TV services generally have a choice between a number of sourcing models, which can be broadly categorised as follows: a. Obtaining TV content produced on an ‘ad hoc’ basis (that is to say tailor- made), by: i. Commissioning TV content from a TV production company (which owns the relevant TV format); ii. Hiring a TV production company to provide the technical means and deliver the finished TV content based on a format owned by the broadcaster; or iii. Producing the content themselves by relying on their in-house facilities (captive TV production); or b. Acquiring broadcasting rights from TV production companies for pre- produced TV content (pre-produced TV content, sometimes referred to as off-the-shelf or tape sales). (13) As regards commissioned TV content, in most cases, TV production companies produce TV content tailored to the needs of their customers on the basis of original TV formats9 that they develop themselves or that they acquire from right holders (commissioned production).