Deal-hungry Bertelsmann bullish on proposed French TV merger
German group awaiting green light to acquire Simon & Schuster as well as competition verdict on M6 and TF1 tie-up
Bertelsmann’s chief executive has said he is “confident” regulators will approve a deal that will allow the German media group to create a national television champion in France, adding he is also eyeing further acquisitions in education and TV production.
Presenting results that showed first-half revenue jumped almost 11 per cent year on year to €8.7bn, Thomas Rabe also said the company was considering a potential listing of its customer service business, Majorel.
In a busy period of dealmaking, Bertelsmann is seeking to convince regulators to give it the green light to combine its M6 station in France with TF1, the broadcaster’s main commercial rival.
“We’re confident we’ll get clearance, but this will take a bit of time,” Rabe said.
The combination would usually breach competition rules, given the enlarged company would control a sizeable chunk of the French television advertising market.
However, Rabe said officials should consider the wider context and in particular the expansion of “very significant” online competitors such as Facebook and Google.
Regulators’ traditional definitions of the competition, he added, “no longer reflect market reality”. He expects the deal to complete by the end of next year.
The French Competition Authority declined to comment.
On the back of its first-half performance, Bertelsmann said it now expected to deliver full-year net income of almost €2bn, a sharp increase from its previous estimate of slightly more than €1bn.
Bertelsmann’s media assets already span the books business Penguin Random House, magazine publisher Gruner + Jahr and music group BMG, as well as the broadcasting division RTL, which runs 67 TV channels, 10 streaming platforms and 38 radio stations. The privately owned company’s other interests also include call centres, education and training.
In its push to consolidate in broadcasting, Bertelsmann has also struck a deal to combine RTL with Dutch media group Talpa in the Netherlands. In books, it is awaiting US regulatory clearance to buy New York-based publisher Simon & Schuster for $2.2bn.
Rabe, who also chairs the company, said Bertelsmann had the firepower to spend between €2bn and €3bn on acquisitions. The figure includes funds being spent on Simon & Schuster, although Rabe said Bertelsmann was also considering deals in the education and TV production sectors.
A rebound in the advertising market boosted the group’s sales in the six months to the end of June, pushing net income up from €488m to €1.37bn.
The largest rise in revenues was recorded at RTL, where they rose 22 per cent on an organic basis. In most countries where RTL operates advertising had recovered to pre-pandemic levels, Rabe said.
The recovery was across client sectors, he added. “It’s really across the board — including tourism, which was obviously hard hit last year.”
Rabe also said an initial public offering of Majorel, which operates call centres and employs about 60,000 people, was “one option” for the business.
German newspaper Handelsblatt reported earlier in August that JPMorgan, Citigroup and BNP Paribas had been lined up to list Majorel in Amsterdam in a transaction that could value it at €3bn. “No decision has been taken,” Rabe said.