ACM clears acquisition of British publishing company Mecom by Belgian rival De Persgroep

The Netherlands Authority for Consumers and Markets (ACM) has conditionally approved the acquisition of British publishing company Mecom Group Plc. (Mecom) by Belgian publishing company De Persgroep Publishing N.V. (De Persgroep). This new publishing company publishes national and regional newspapers, as well as free local papers, in almost the entire Netherlands.

De Persgroep is the publishing company behind several major Dutch national newspapers such as Algemeen Dagblad, De Volkskrant, Trouw, and Amsterdam-oriented newspaper Het Parool. It also owns national radio station Q-music, and various websites such as Autotrack. Mecom’s subsidiary Wegener publishes the following regional Dutch newspapers: De Gelderlander, De Stentor, Brabants Dagblad, BN DeStem, Eindhovens Dagblad, Provinciale Zeeuwse Courant and De Twentsche Courant/Tubantia.

Chris Fonteijn, Chairman of ACM, adds: ‘The media industry is currently undergoing some major changes such as a decline in newspaper readership, an increase in online news, and alternative advertisement options. When assessing this merger, we tried to find out whether readers and advertisers continued to have enough choice after the planned merger, including for newspaper distribution. And that is the case with this merger, in part because of the further arrangements that have been made.’

ACM has looked into the merger’s effects on advertising space in newspapers and free local papers, as well as on printing and delivery of newspapers. ACM comes to the conclusion that, only with the delivery of newspapers, additional arrangements are needed in order to continue to have enough competition. Last year, ACM already came to the conclusion that the acquisition would not have any adverse effect on newspaper readers.

Arrangements about newspaper delivery

Newspaper publishers currently have certain arrangements regarding delivery. In each region, the publisher with the highest number of subscribers usually also delivers the morning newspapers of all of the other publishers. As a result, delivery costs of the morning newspapers are as low as possible. After the acquisition, De Persgroep/Mecom will deliver newspapers in two thirds of the Netherlands. Other newspaper publishers thus become too dependent on De Persgroep’s delivery network. De Persgroep has offered to continue the current delivery arrangements with the distribution business of Telegraaf Media Groep. Newspaper publishers that do not have their own distribution network, such as NRC Media, thus also benefit from this offer. This way, distribution of all newspapers against fair conditions has been guaranteed. These arrangements will be in place for at least the next ten years.

Advertisers have enough alternatives

ACM has conducted a comprehensive analysis of the advertising market for newspapers. It turns out that the newspapers of De Persgroep (national newspapers) and Mecom (primarily regional newspapers) largely attract different advertisers. Hence they cannot be considered major competitors of each other. This means the acquisition will not lead to anti-competitive problems for advertisers. Advertisers often specifically choose one national, regional or free local paper. Then there are, of course, advertisers that simultaneously advertise in multiple newspapers. However, the majority of advertisers and media agencies do not expect to see any price increases of advertising space in newspapers after the acquisition. And if prices did increase, they would place more ads in other media such as TV, radio, internet and in advertising brochures.

Enough printing capacity for newspapers

ACM comes to the conclusion that, after the acquisition, enough printing companies will continue to exist that are able to print newspapers (including at night). De Persgroep has its own printing presses with enough capacity to print its own newspapers, as well as publications of other publishers. In addition, there are other printing companies in the Netherlands that are able to print newspapers.