³Ô¹ÏÍøÕ¾

The ACCC has raised preliminary competition concerns about the proposed sale of Pacific Magazines (ASX: SWM) to Bauer Media, in a deal that would combine Australia’s two biggest magazine publishers.

The ACCC is particularly concerned about the impact of the proposed acquisition on some key weekly magazine titles. Bauer’s Woman’s Day competes closely with New Idea, owned by Pacific Magazines, and Bauer’s Take 5 magazine competes strongly with Pacific Magazines’ That’s Life.

“Pacific Magazines and Bauer are the only magazine publishers in certain categories, and their titles appear to compete head-to-head on content and cover price,” ACCC Chair Rod Sims said.

“We are acutely aware of the dramatic decline in magazine revenue, both in terms of lost advertising and reduced sales. The trends in the media sector were considered closely in our published in July. Many magazines titles have closed over recent years, and more titles will close irrespective of this deal.”

“However, competition within markets has an important role to play to protect consumers, even in declining markets,” Mr Sims said.

“The key Bauer and Pacific Magazine titles remain profitable, and in some cases average more than one million readers per issue.”

“If Bauer bought Pacific Magazines, Bauer would remove its closest competitor in certain segments. Our preliminary view is that this would allow Bauer to reduce the effort put into content production and the range of content, or to increase prices.”

“While there is free online content available that resembles the content in these magazines, many consumers still value the physical format of magazines, the packaging together of stories, puzzles, prizes and other content, and the style of the articles produced by each magazine,” Mr Sims said.

“Our preliminary view is that many readers have a strong preference for print magazines in the key weekly categories.”

The ACCC is also continuing to consider the impact of the proposed acquisition on content acquisition including photographs.

The ACCC has published a statement of issues outlining its preliminary concerns. It invites submissions from interested parties by 14 February 2020. The ACCC’s final decision is scheduled for 2 April 2020.

Further information is available at .

Background

Bauer publishes magazines (print and digital versions) and also publishes content online.

Bauer is part of the Bauer Media Group, which is based in Hamburg, Germany. Bauer Media Group is a privately-owned international media company publishing over 600 magazine titles globally.

Pacific Magazines is a publisher of content in magazines (print and digital versions) and online.

Pacific Magazines is a wholly-owned subsidiary of ASX-listed Seven West Media Limited. Seven West Media is a national media provider across television, magazine and newspaper publishing and online platforms.

Seven Group Holdings Limited, an Australian diversified operating and investment group, has a 41 per cent shareholding in Seven West Media.

Bauer’s and Pacific Magazines’ titles in content categories that overlap are as follows:

Readership of key titles in the “women’s interest” and real life categories is as follows:

Source: Enhanced Media Metrics Australia (July 2018 – June 2019). Print readership represents the average number of readers aged 14+ per issue over a period of 12 months