A “narrow” view of the advertising market has put an end to plans to create a $1.6 billion outdoor advertising giant.
APN Outdoor and oOh!Media have canceled plans to merge the two outdoor advertising companies after the competition watchdog raised concerns over the deal.
Earlier this month the ACCC announced it had reservations over the proposal after hearing criticism from industry participants that more than half of the outdoor advertising market would be controlled by one company if the deal went ahead.
Today APN Outdoor and oOh!Media announced both parties have agreed the ACCC intervention represents an “unacceptable risk to a successful merger.”
“It is the parties’ view that offering the material concessions to the ACCC which are likely to be required to ultimately allow the merger to proceed would adversely compromise the overall merits of the transaction,” the companies said in a statement.
The outdoor advertisers criticised the ACCC’s decision to view the outdoor channel in isolation rather than part of a broader advertising environment.
“oOh!media approached this transaction as a positive move for advertisers, agencies and landlords, and viewed the potential combination as an exciting opportunity for the media market,” stated Brendon Cook, Managing Director and CEO of oOh!media.
“We’re amazed that in this day and age, the media market could be divided into narrow segments, and we cannot fathom how anyone could suggest a merger such as this could restrict innovation – innovation is core to our business and always will be, and by its nature is not limited by funding, it’s available to anyone who makes it a core part of their strategy.
“So we don’t agree with the ACCC position, but don’t want to spend six to 12 months educating the ACCC or in court, especially as the media market is changing so quickly – hence our mutual decision.
“Despite this decision, we remain focused on continuing to enhance the value of our innovative and established businesses and continue to deliver on and build out our clear strategy. As always, we will continue to look for opportunities that align with our new media strategy and enhance shareholder value.”
Scrapping the merger means making changes to a number of executive moves that were announced as part of the deal.
oOh!media Chairman Michael Anderson announced his intention to resign as Chairman of oOh!media in August 2016, following his appointment as CEO of MediaWorks in New Zealand. Anderson subsequently agreed with the Board to defer his resignation pending completion of the proposed merger. As a result of the termination of the Scheme Implementation Deed, oOh!media will immediately resume the search for a new Chair and Anderson has agreed to continue as Chairman until an appropriate successor is identified, the company said.
Peter McClelland will continue in his role as oOh!media’s CFO & COO. The balance of Directors of the OML Board will remain on the Board of OML.