The European Commission (EC)'s competition regulators have decided to probe the proposed merger of Pearson Television and CLT-Ufa.
The EC has used its merger regulation powers to open a preliminary, one-month review of the $19bn deal that was announced in April (Screendaily, Apr 07) . The companies were notified on May 24 and the Commission will deliver a view by June 29. This may decide that there is no anti-trust case to answer, call for a full investigation or ask for further time.
The deal which was billed as a marriage of Pearson's content and CLT's broadcast capacity, is the largest to date in the rapid consolidation of Europe's television and new media sectors. If greenlit it would result in the creation of a conglomerate with annual revenues of $3.95bn (Euros4bn) and interests spanning television and radio broadcasting, film and TV libraries, TV production, sports rights management, local film distribution and online services.
The deal - which the EC describes as "Bertelsmann and GBL taking joint control of Pearson Television from Pearson plc" - sees Pearson Television and CLT-Ufa folded into Audiofina, one of the holding companies that currently control CLT-Ufa. Audiofina is to be renamed and shift its primary stockmarket listing from Luxembourg to London. After the deal CLT-Ufa's two owners, Bertelsmann of Germany and GBL of Luxembourg, would have stakes of 37% and 30% respectively, while Pearson would hold 22%. The remaining shares are to float on the London Stock Exchange.
Other media deals under EC investigation include Canal Plus and Lagardere's planned digital television alliance (Screendaily, May 25), Time Warner and EMI's joint venture plans and the proposed merger of America Online with Time Warner.