European Commission gives the go-ahead to the creation of a joint venture for distribution to kiosks in Italy
The European Commission has authorised the creation of a joint venture by Holding di Partecipazioni (HdP) and De Agostini, two players on the Italian media market. The joint venture, called RCS Diffusione, will distribute to local outlets throughout the country both newspapers and magazines and a range of other products (mobile phone top-up cards, batteries and personal hygiene products). The operation does not give rise to competition concerns.
HdP is a holding company active in the media sector in Italy (publishing, radio broadcasting, advertising management) via a number of subsidiaries: publication and distribution of newspapers (RCS Editori, RCS Diffusione), magazines (chiefly RCS Periodici) and part-works (RCS Collezionabili). The De Agostini group is engaged in the publication and distribution of a range of print media in Italy, including part-works.
Following the operation, De Agostini and HdP will exercise joint control over RCS Diffusione, while the Hachette-Rusconi group will hold a minority stake. The transaction had to be cleared by the Commission because the two main parent companies’ turnover exceeds the thresholds laid down in the Merger Control Regulation.
The parties currently distribute their print media through different subsidiaries: RCS Diffusione (wholly controlled by HdP) and Deadis S.r.l. (controlled by De Agostini and in which Rusconi has a minority stake). They have decided to group together in the joint venture the distribution to local sales outlets of print media and other products.
The joint venture will not merely distribute the print media (newspapers, magazines, etc.) produced by the parent companies; it is to enter into agreements with other publishers with a view to distributing their products to kiosks. The joint venture will also generate a significant proportion of its turnover from the distribution to kiosks of other products such as top-up cards for mobile phones, batteries and razors. This is made possible by recent amendments to the law allowing kiosks to extend the range of products they sell.(1)
In the light of its investigation the Commission came to the conclusion that creation of the joint venture does not raise competition concerns: RCS Diffusione will not gain significant room for manoeuvre in relation to customers, competitors or consumers, even if it were to increase its market share in the years ahead as forecast in the business plan. The operation could also promote rationalisation of the currently extremely fragmented Italian market in distribution to kiosks, in which there are a number of operators with market shares of less than 1%.
(1) In particular Industry Ministry Circular No 3482/C of 21 March 2000, which in turn refers to Law No 108 of 13 April 1999 (New rules on sales outlets for newspapers and magazines).
