The Proposed Acquisition of sole control of Independent Star Limited by Reach Publishing Group Limited Phase 1 Assessment M_2020_2 Table of Contents Table of Contents .......................................................................................................... i 1. Background ............................................................................................... 3 The Purchaser: ................................................................................................. 3 The Target: ....................................................................................................... 3 Media Sector ................................................................................................................. 4 The Purchaser: ................................................................................................. 5 The Target: ....................................................................................................... 6 2. Application of the Relevant Criteria & s. 28D (2) of the Competition Act. 9 Significant Interests ..................................................................................................... 9 The Purchaser: ............................................................................................... 10 The Target: ..................................................................................................... 11 Impact:............................................................................................................ 13 Relevant Media Assets ............................................................................................... 14 The Purchaser: ............................................................................................... 15 The Target: ..................................................................................................... 15 Impact:............................................................................................................ 17 Ownership and Control.............................................................................................. 18 Relevant Media Assets:.................................................................................. 18 Regulatory Oversight: .................................................................................... 18 Proposed Changes: ........................................................................................ 19 Impact:............................................................................................................ 19 Market Share .............................................................................................................. 19 Brand & News Reach: .................................................................................... 21 The Views of the Parties ................................................................................ 21 Impact:............................................................................................................ 22 Media Merger – Parties; Examination - i - Governance and Editorial Management ................................................................... 22 Compliance and Ethics .................................................................................. 24 Editorial Ethos ............................................................................................... 24 Impact ............................................................................................................. 25 Content – Diversity .................................................................................................... 25 The Purchaser ................................................................................................ 25 The Target ...................................................................................................... 26 Impact ............................................................................................................. 28 Financial .................................................................................................................... 28 Proposed Transaction Structure: .................................................................. 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 ..................................................... 30 The Overall Views of the Undertakings Involved .................................................... 31 3. Summary of the Application of the Relevant Criteria & s. 28D (2) of the Competition Act ................................................................................................. 32 4. Conclusion .............................................................................................. 36 Media Merger – Parties; Examination - ii - 1. Background 1.1 The Proposed Transaction involves the acquisition of 50% of the issued voting share capital of Independent Star Limited (ISL) and 100% of the issued non-voting share capital of ISL (the Target Group) by Reach Publishing Group Limited (the Purchaser) (together the Parties) (the Proposed Transaction)1. 1.2 The Parties are making a joint notification2. The Purchaser: 1.3 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 offerings3. 1.4 The Purchaser currently owns 50% of the issued voting share capital of ISL.4 1.5 The Purchaser is a wholly owned subsidiary of Reach Plc. Reach Plc is a UK-based newspaper publishing group.5 The Target: 1.6 The Target Group refers to 50% of the issued voting share capital of ISL and 100% of the issued non-voting share capital of ISL. 1.7 In the State, the Target Group is active in the Publishing and Internet Media sectors through the publication of newspapers and the provision of online news offerings.6 1.8 The Target Group is currently owned by Independent Communications (Ireland) Limited (Independent Communications). Independent Communications is a wholly owned subsidiary of Independent News & 1 M_2020_2 Reach / ISL Notification form p. 2 2 M_2020_2 Reach / ISL Notification form p. 4 3 M_2020_2 Reach / ISL Notification form 4 M_2020_2 Reach / ISL Notification form p. 3 5 M_2020_2 Reach / ISL Notification form p. 2 6 M_2020_2 Reach / ISL Notification form Media Merger – Parties; Examination - 3 - Media Group (INM). INM is a wholly owned subsidiary of Mediahuis NV (Mediahuis)7. Taken together these are the Seller Group. 1.9 Mediahuis is a privately owned company registered in Belgium.8 Media Sector 1.10 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: ‘media business’ means the business (whether all or part of an undertaking’s business) of— 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, transmitting, re-transmitting or relaying a broadcasting service, providing any programme material consisting substantially of news and comment on current affairs to a broadcasting service, or 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; 1.11 Furthermore, the current Guidelines on Media Mergers (the Guidelines) provides the following supplementary definition of a “media sector”: ‘media sector’ means one of the following (and ‘media sectors’ means one or more of the following collectively): Publishing – publication of newspapers or periodicals consisting substantially of news and comment on current affairs and the production of content for same. 7 M_2020_2 Reach / ISL Notification form p. 3 8 M_2020_2 Reach / ISL Notification form p. 2 Media Merger – Parties; Examination - 4 - Broadcasting – transmitting, re-transmitting or relaying a broadcast service including radio or television and the production of content for same. Internet Media – making available on an electronic communications network any written, audio-visual or photographic material consisting substantially of news and comment on current affairs. 1.12 Furthermore, the Guidelines also note a number of sectors, these being television, radio, print media, internet, [and] other media interests, on the basis of which cross-media interests can be considered. 1.13 The Guidelines provide a working method